Beijing Automotive Group (BAIC), Daimler AG’s partner in China, has bought a significant chunk of the German automaker.
As reported earlier this year, BAIC has acquired an equity interest of approximately five percent in Daimler AG through Investment Global Co. Ltd., a 100-percent subsidiary. While the terms of the deal have not been made public, the parent company of Mercedes-Benz said it welcomes its cooperation partner as a new investor.
“We are very pleased that our long-standing partner BAIC is now a long-term investor in Daimler. This step reinforces our successful partnership and is a signal of trust in the strategy and future potential of our company,” said Ola Källenius, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.
“The Chinese market is and remains a crucial pillar of our success – not only for sales, but also for our product development and production,” the executive added.
As for BAIC, the company said the move reflects its deepening ties with the German partner. “This step reinforces our alignment with, and strong support for, Daimler’s management and strategy,” said BAIC chairman Heyi Xu.
Daimler and BAIC have been collaborating as joint venture partners in China since 2003. Since then, the two companies have cooperated in the production, research and development, and sale of passenger cars, vans and trucks.
In 2013, Daimler acquired an equity interest in BAIC Motor, a listed subsidiary of BAIC, and currently holds 9.55 percent of its shares. In 2018, Daimler has also taken an interest of 3.01 percent in BAIC BluePark New Energy Technology Co. Ltd., a manufacturer of electric vehicles for China.
With the acquisition of a five percent stake in Daimler AG, BAIC has become the second major Chinese automotive entity to do so. In 2018, Geely Group’s chairman Li Shufu bought a 9.69 percent stake in Daimler via a shell company named Tenaciou3 Prospect Investment Limited.
It remains to be seen whether BAIC’s move will be followed by an attempt from Daimler to gain a majority stake in Beijing Benz Automotive, its main joint venture with BAIC.