As much as 10 percent of Stuttgart-based German automaker and world-leading truckmaker Daimler AG may soon belong to China Investment Corp (CIC). According to Chinese Communist Party media reports on Monday, talks of acquisition are currently in progress.
Daimler AG welcomes new investors
Daimler AG would not comment on the report in the People’s Daily Chinese newspaper that CIC would buy somewhere between 4 percent and 10 percent of the company. However, Daimler did not deny that the investment would occur.
“In general, we always welcome any new investors, as a balanced shareholder structure is in the interest of Daimler,” said a spokesperson for Daimler AG.
Has Daimler hired an investment bank?
According to Germany financial magazine Manager, Daimler AG has hired an investment bank to set up a deal to sell stock. CIC was reported to be in the lead to make a deal. Others included sovereign wealth fund Aabar out of Abu Dhabi, which became Daimler’s largest investor in 2009 when it took control ov 9 percent. Aabar began selling its holdings in Daimler AG over the past year, however, jettisoning its last 3.07 percent in interest in October 2012.
Chinese analyst Zhang Xin of Guotai Jun’an Securities noted that a Daimler AG – CIC deal seemed a like straight-head, non-controversial setup. This is because CIC is a financial investor formed by the state to invest China’s $3 trillion in currency reserves, rather than a Chinese automaker like BAIC Group. There would be little concern of CIC’s direct interference in Daimler AG’s operation. Interestingly, Daimler does have a partnership with BAIC in which Mercedes-benz cars are sold in Beijing and vans in Fujian province. Beijing’s Foton Motor Co. has a truck partnership with Daimler, and Chinese electric vehicle make BYD is currently developing new models in collaboration with Daimler.
Mercedes-Benz goes to China
Daimler AG is the parent automaker of Mercedes-Benz, the third-largest luxury vehicle brand in the world. In 2012, Daimler moved 1.32 million Mercedes cars. Of those, almost 200,000 were sold in China.
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