Chinese Auto Magnate Buys $9 Billion Stake in Daimler

Kelley Robertson
February 25, 2018

It is to become a holding company combining three divisions: financial services, cars and small commercial vehicles and trucks and buses.

"While companies like Geely continue to develop their own products for the long-term, they see an opportunity to own some winners right now", he said. Volvo announced past year that none of its new models from 2019 will have simple combustion engines, but will be powered at least partly by electricity and other sources.

Geely Group also owns one of China's largest car-sharing providers, Cao Cao (100%), operating a fleet of around 16,000 electric vehicles worldwide.

Zhejiang Geely Holding Group, headquartered in the eastern Chinese city of Hangzhou, is one of China's largest private automakers. "At the same time, this opens another path into China for Daimler". It issued a statement saying it was pleased with the investment. Ltd., a sister company of Geely that is owned by Li and his son, bought the stake in Frankfurt-listed Daimler, according to a regulatory filing released by Daimler on Friday.

Daimler said it welcomed the investment as a "vote of confidence" in its future.

Daimler overtook homegrown rival BMW to become the world's largest luxury vehicle maker by unit sales in 2016, helped by a broad refresh of its model range and powerful sales growth in China. Major assets of the group include leading Chinese automaker Geely Automobile Holdings Ltd. (46%); Volvo Cars (100 percent); Lotus Motor Cars (51%); Proton Cars (49.9%); and London Taxi (100%). The Chinese firm hasn't showed any signs of slowing down, either. Geely plans to start selling a compact five-seat SUV, now marketed under the Lynk & Co brand, outside China from mid-2019. It's likely to look first at Europe. While Daimler said the move isn't a prelude to a spin-off of any of the businesses, some investors have called on the company to consider an eventual split on the back of the clearer delineation between the units.

And it seems that't exactly what he's done, and now owns 9.69 per cent of Daimler - which will have cost him around £6.5 billion - making Li the single largest shareholder, with 50 per cent more stock than the next biggest shareholder Kuwait Investment.

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