Geely Chairman Grows Stake in Daimler to $9 Billion

Alyssa Bailey
February 25, 2018

"It will be an honour to support this unique team under the leadership of Dieter Zetsche in the future", Li Shufu, chairman and owner of Zhejiang Geely Holding Group and Geely Group said in a statement.

The investment by Li Shufu, which Daimler confirmed Friday in a regulatory filing in Germany, represents 9.69 percent of the company. Bloomberg News first reported that Geely has become the single largest investor in the parent of Mercedes-Benz by building up a position of just under 10 per cent through purchases in the stock market in recent weeks.

With revenue exceeding RMB 270 billion (US$ 42.7 billion) in 2017, the Zheijang Geely Holding Group is China's largest privately owned automotive manufacturing company and one of the world's leading providers of electro-mobility. They might bristle at the Geely relationship, but given their contract to make the Smart ForFour vehicle for Daimler, they are unlikely to ditch their combined stake.

The deal, which is yet to be approved by Chinese regulators, has boosted Geely's existing overseas investment portfolio.

Daimler now has a joint venture with BYD in China to build electric cars.

His interest in Germany is the latest in a string of acquisitions by wealthy Chinese firms and individuals, including conglomerate HNA which owns an 8.8% stake in the country's biggest lender Deutsche Bank.

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Geely is also the owner of Swedish brand Volvo.

In December, Li became the biggest shareholder in Sweden's Volvo AB, the world's second-largest truckmaker.

Geely had previously acquired a 49.9 percent controlling stake in Malaysian automaker Proton a year ago.

Chinese investors in German technology companies have tended to take a consensual approach, buying incremental stakes in companies such as robotics firms Kuka and Kion, typically after long consultation with management and other stakeholders.

The move marks a further push into Europe for the Chinese carmaker, a market Geely hopes to break into in its own right with its all-electric Lynk & Co brand next year.

Kuwait's sovereign wealth fund owned about 6.8 percent of Daimler's shares as September 30, according to Thomson Reuters data.

Other reports by GlobalViralNews

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