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MarketScreener Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  BAIC Motor Corp Ltd    1958   CNE100001TJ4

BAIC MOTOR CORP LTD (1958)
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China's Geely buys shares in Germany's Daimler - sources

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02/06/2018 | 05:29pm CEST
Daimler AG sign is pictured at the IAA truck show in Hanover

FRANKFURT/BEIJING (Reuters) - Chinese carmaker Geely has bought shares in German car and truck maker Daimler (>> Daimler), two people familiar with the matter told Reuters, as the Chinese owner of Volvo cars seeks to strike an alliance over electric cars technology.

FRANKFURT/BEIJING (Reuters) - Chinese carmaker Geely has bought shares in German car and truck maker Daimler (>> Daimler), two people familiar with the matter told Reuters, as the Chinese owner of Volvo cars seeks to strike an alliance over electric cars technology.

The size of the stake is unclear but likely to be below 3 percent, as that level would require Geely to make a regulatory disclosure in Germany.

It was also unclear whether Geely, which owns London taxi manufacturer LEVC as well as stakes in Volvo trucks (>> Volvo) and Lotus sportscars, had sought to buy more Daimler shares.

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

At the time, Daimler declined to issue new shares because it did not want to see existing stockholders diluted, sources with knowledge of the talks said.

Now sources say Geely has decided to build a stake by buying existing shares.

"Geely has opted mainly to show their seriousness and to impress on Daimler folks that they are not going away," one of the sources, who declined to be named, said.

A spokesman for Geely declined to comment.

Daimler on Tuesday reiterated it would welcome interest from long-term shareholders and added any significant changes to its shareholder structure would be published on its website.

Speaking at an event in Duisburg, Germany, Daimler Chief Executive Dieter Zetsche said on Tuesday he had no information about Geely's purchases of Daimler shares.

"I haven't seen the chairman of Geely at least for a year," Zetsche told Reuters after presenting Daimler's New Mercedes-Benz Sprinter van.

People with knowledge of Geely's thinking have said the company is keen to access Daimler's electric car battery technology and wants to establish an electric car joint venture in Wuhan, the capital of China's Hubei province.

Carmakers in China have come under pressure to ramp up production of battery electric and hybrid vehicles ahead of tough new quotas to be imposed by Beijing, which wants to reduce urban smog and lower the country's reliance on oil.

Geely hopes Daimler will see the mutual benefits of a partnership to scale up production of electric car components, as China tightens the screws on combustion-only vehicles, a second source familiar with the matter said.

Daimler executives have said they see no need to take on another industrial partner in China because there is significant capacity for expansion in a venture jointly run with China's BAIC Motor Corp (>> BAIC Motor Corp Ltd).

Daimler executives have also seen the problems encountered by rival Audi (>> Audi AG) in China, which sought to establish a relationship with SAIC (>> SAIC Motor Corporation), but alienated its existing dealers who were dependent on Audi's Chinese partner FAW [SASACJ.UL], leading to lost sales.

Among Daimler's largest shareholders are Blackrock, which reported it held a 5.95 percent stake on Nov. 15; the Kuwait Investment Authority with a 5.33 percent stake; and the Renault-Nissan alliance with 3.1 percent, according to German regulator BaFin's website.

At 1220 GMT, Daimler shares were down 2 percent at 69.31 euros amid a global sell-off in equities.

(Reporting by Edward Taylor in Frankfurt Norihiko Shirouzu in Beijing and Joe White in Duisburg; Additional reporting by Arno Schuetze and Hans Seidenstuecker; Editing by Maria Sheahan, Mark Potter and David Evans)

By Edward Taylor and Norihiko Shirouzu

Stocks mentioned in the article
ChangeLast1st jan.
AUDI AG 0.00% 714 Delayed Quote.-1.65%
BAIC MOTOR CORP LTD -2.92% 5.98 End-of-day quote.-41.94%
DAIMLER -2.48% 55.05 Delayed Quote.-22.25%
SAIC MOTOR CORPORATION -2.41% 29.17 End-of-day quote.-6.71%
VOLKSWAGEN -3.12% 138.44 Delayed Quote.-16.83%
VOLVO -2.28% 145.5 Delayed Quote.-2.49%
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Financials (CNY)
Sales 2018 152 B
EBIT 2018 23 077 M
Net income 2018 6 945 M
Finance 2018 13 995 M
Yield 2018 5,47%
P/E ratio 2018 6,06
P/E ratio 2019 4,82
EV / Sales 2018 0,19x
EV / Sales 2019 0,09x
Capitalization 43 608 M
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Number of Analysts 27
Average target price 8,73  CNY
Spread / Average Target 62%
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Hong Liang Chen President & Executive Director
He Yi Xu Chairman
Zhang Fei Gu Chairman-Supervisory Board
Yin Fu Qiu Non-Executive Director
Hubertus Troska Non-Executive Director
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