The Chinese automaker BAIC Motor is in talks with the German luxury carmaker Daimler AG for a stake into the company, seek as two sources for Reuters stated.
Daimler already has 10% stake in BAIC, Hong Kong’s listed unit of China’s Beijing Automotive Group and discussions on BAIC’s investment in Daimler are ongoing, according to the same sources. If the two automakers decide on it, BAIC will be the third Chinese carmaker to invest in a foreign car producer, following Dongfeng Group, which has taken a stake in PSA Peugeot Citroen and SAIC Motor that bought General Motors shares.
Shares in Daimler went up 3.8%, surpassing Germany’s DAX growth of 2.8%. Over the past years, Daimler and BAIC have joined ventures in China to supervise production and sales of Mercedes-Benz passenger cars in the world’s biggest auto market that has been going through an economic downturn lately.
Want China Times, news website of the Taiwan based China Times News Group, stated that BAIC’s chairman, Xu Heyi, confirmed on Monday that the two companies are in talks and that an outcome is expected to be reached by the end of this year. Want China Times explained that if the deal is completed, BAIC will become one of the top shareholders of Daimler. At the moment, the largest shareholders of Daimler are Renault-Nissan with a 3.1% stake and Kuwait’s investment authority with 6.8%
Daimler has recently indicated it is open to long-term shareholders from China, adding that while it is satisfied with its current structure, it stays open to long-term investors.