Geely Owner Buys Nearly 10% Stake in Daimler

Bill Rogers
February 25, 2018

Chinese billionaire Li Shufu (李書福) has bought a almost 10 percent stake in Mercedes-Benz maker Daimler AG, making him the German group's largest single shareholder, a stock market filing showed on Friday.

Billionaire Li Shufu, the owner and chairman of the Chinese carmaker, acquired the stake through an investment fund, the filing shows. The size of the investment leapfrogs a 6.8-percent stake in the Stuttgart-based group held by Kuwait and Renault-Nissan's 3.1-percent holding.

Daimler said it knows and appreciates Li Shufu as an especially knowledgeable Chinese entrepreneur with clear vision for the future, "with whom one can constructive discuss the change in the industry". 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.

Geely first tapped into the European market with a buyout of Sweden's Volvo Cars in 2010.

Daimler issued a brief statement confirming that Li Shufu acquired 9.69% (103,619,340 shares) of the company. He is now one of the wealthiest people in China, with a net worth estmated by Bloomberg at $13.8 billion. It also has a strong 49 per cent stake in the Malaysian brand Proton, ownership of LEVC (responsible for making London cabs), and a stake in the flying-car start-up Terrafugia.

In November, sources told Reuters that Daimler had turned down an offer from Geely to take a stake of up to 5 percent via a discounted share placement.

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It reported a 24 percent leap in net profits past year, to 10.9 billion euros, when it presented its annual earnings earlier this month.

Mr. Li, 54, is chairman of Zhejiang Geely Holding Group, a private company that owns a Chinese carmaker, Geely Automobile, as well as Volvo Cars, the Swedish auto brand.

Worldwide motor manufacturers are seeking to strike deals in China, the world's largest vehicle market, but centred on electric cars in order to get an increased foothold in a segment set to grow rapidly in the coming years.

The biggest shareholder in Germany's Daimler AG, Chinese carmaking giant Geely, has promised a long-term investment in the luxury auto firm after acquiring almost 10% of its shares.

The Stuttgart firm is unusual among its German peers in lacking a single controlling shareholder, whereas Volkswagen is dominated by the Porsche-Piech clan and BMW by the Quandt-Klatten family.

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