Chinese carmaker Geely has bought shares in German car and truck maker 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%, as that level would require Geely to make a regulatory disclosure in Germany.
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% 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. One of the sources who declined to be named, said:
“Geely has opted mainly to show their seriousness and to impress on Daimler folks that they are not going away”
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.
Related: Geely Aims to Challenge Porsche
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.
Among Daimler’s largest shareholders are Blackrock, which reported it held a 5.95% stake; the Kuwait Investment Authority with a 5.33%; and the Renault-Nissan alliance with 3.1%, according to German regulator BaFin’s website.