Reuters reported in 26th that the BAIC (Beijing Automotive Industry Holding Co.) will expand its stake in German luxury car manufacturer Daimler. Which currently stands at 5 percent.
The report stated that “both sides are willing to increase stakes in the other”, citing officials from BAIC Motor Corp Ltd. in an investor conference last October.
BAIC acquired 5 percent of Daimler shares in July through British banking giant HSBC. However, according to documents submitted by Daimler to the authorities on the 22nd, HSBC had 5.23% of voting rights in Daimler as of Nov. 15.
On Monday, Daimler confirmed that it received a report from HSBC upon the voting rights of its holdings exceeded 5 percent.
However, the source stated that he couldn’t say whether BAIC has taken a part on this. He only said that the company welcomes long-term share holders such as BAIC.
Geely, Daimler’s biggest share holder stated:
“We are a long-term investor in Daimler. We do not react spontaneously to any volatility and we support Daimler’s management and their strategy.”
BAIC and Daimler: for China’s fast growing luxury car market
Xu Heyi, chairman of BAIC, earlier issued a statement on July 23 saying he acquired a 5 percent stake in Daimler. Aadding that he will partner with Daimler’s management and strategy and provide strong support.
The BAIC is yet to officially announce the plan to increase shares in Daimler. But given Daimler’s market capitalization at this point, it is equivalent to 2.6 billion euros in 5 percent shares.
Daimler has also been linked to the BAIC’s Hong Kong-listed subsidiary by engaging in capital participation since 2013.
In February last year, BAIC decided to invest 11.9 billion yuan with Daimler to set up a Mercedes-Benz plant for luxury cars.
BAIC has been strengthening its joint venture with Daimler. This in line with its plan to firmly take the lead in China’s fast-growing luxury car market.
China is one of the world’s biggest luxury car market. It is also the world’s biggest electric vehicle market.