German markets regulator to probe Geely's Daimler stake disclosure

German markets regulator to probe Geely's Daimler stake disclosure

Geely chairman Li Shufu buys a significant chunk of shares from Daimler.

WASHINGTON-Daimler says that Chinese businessman Li Shufu, chairman of Zhejiang Geely, has acquired nearly 10 per cent of the German automaker's shares. To achieve and assert technological leadership, one has to adapt a new way of thinking in terms of sharing and combining strength.

Daimler made an easy target for cash-flush Geely. Mercedes-Benz has even been officially tallying the months: 58 in a row as of December.

Germany has said there is no need to take action on the stake owned by Li and Daimler has said it is pleased that it could win another long-term oriented shareholder with Li.

Speaking of expansion in China, just a few days ago, February 26, Daimler and BAIC announced plans to further expand production.

Geely getting closer to Daimler may result in the German company severing its ties with EV maker BYD, said Steve Man, an analyst at Bloomberg Intelligence.

Li's business ambitions appear to align with those of China's government, which wants to strengthen the country's high-tech expertise and leapfrog global auto rivals by becoming a leader in electric vehicles and autonomous driving.

With 9.7 percent of Daimler's outstanding shares, he has now bought himself a seat at the negotiating table.

According to the announcement made by BAIC in Hong Kong, the two companies will together invest more than $1.9 billion on building the new car plant.

She told reporters in Berlin on Tuesday that "we are open with our trade partners and at first glance don't see any kind of violations".

The automaker has one of the most aggressive electrification plans amongst established automakers. The joint venture with Daimler seems to have grown more important for BAIC Motor and for BAIC Group as a whole. Daimler, which employs 289,000 people, declined to do a deal as it had reservations about a new industrial alliance for fear of alienating its existing Chinese joint venture partner BAIC, a person familiar with the carmaker's thinking said. The purpose of the transaction was the attempt of the Chinese company to access technologies in the field of electromobility. They added, 'The company would like to confirm and clarify that it is not a party to the acquisition and it (Daimler) is not partnering with Geely Holding in relation to the acquisition'. China is already the world's biggest market for electric vehicles, and a region Daimler has targeted for growth. "The events of last Friday are the latest demonstrations of China's growing confidence and assertiveness, growing desire to impose its will on global affairs, and growing willingness to exploit the German OEMs' heavy reliance on Chinese profits", Bernstein Research said. This a part of the electric initiative that the Chinese government has mandated for all automakers who wish to continue operating in China.

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