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Daimler to take stake in China's BAIC Motor
Photo: DPA

Daimler to take stake in China's BAIC Motor

Published: 01 Feb 2013 14:14 GMT+01:00
Updated: 01 Feb 2013 14:14 GMT+01:00

German automaker Daimler said on Friday that it has agreed to acquire a 12-percent stake in BAIC Motor, the passenger car unit of China's Beijing Automotive Group.

"Daimler and Beijing Automotive Group will significantly deepen their already strong strategic partnership," the German group said in a statement.

Under a binding agreement signed by Daimler chief executive Dieter Zetsche and BAIC chairman Xu Heyi in Stuttgart, "Daimler is going to invest in BAIC Motor, the passenger car unit of BAIC Group," the statement said.

"This important joint strategic move comes ahead of an intention by BAIC Motor to launch an initial public offering (IPO) in the future. Daimler's investment will take place through the issuance of new shares corresponding to a twelve percent stake in BAIC Motor," it said.

The purchase of the stake was subject to the approval by the relevant authorities and a closing of the transaction was expected "by the end of this year or early next year."

As part of the agreement, Daimler would receive two seats on the BAIC Motor's board of directors.

BAIC will increase its stake in the production joint venture Beijing Benz Automotive Company (BBAC) to 51 percent from 50 percent.

At the same time, Daimler would increase its stake in the integrated sales joint venture Beijing Mercedes-Benz Sales Service also to 51 percent from 50 percent.

"Following our technical cooperation with BAIC Motor and the setup of our integrated sales company, we are now taking the next step in deepening our relationship even further," said Zetsche.

"Our investment is a strong sign of the increased level of trust and cooperation between our two companies and clearly emphasizes the long-term commitment to a joint successful future of our two companies," he said.

AFP/mry

The Local (news@thelocal.de)

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Your comments about this article

15:19 February 1, 2013 by smart2012
here it is: Daimler invests in China and will save in Europe (and btw, two weeks ago they announced that a Chinese group took 10% of Daimler shares)..

do u finally see where the business is going, and even more, where the cars for Asian market will be made? Not for sure in Germany
05:02 February 8, 2013 by honeybeee
The whole Germany car industry is consisted of many very smart car manufactures just like Benz, which is now intergrated with China¦#39;s Baic Moto to increase their own market share in China. The same example is Germany¦#39;s Schaeffler Ag ,a car-parts supplier company .They have been invested in the mainland china since1995. In order to be able to operate successfully, Schaeffler have established an effective international control system which is an integral part of its risk management. Foreign exchange risk is just averted because they have invested many places abroad in India and East Europe as well as in China which is all managed centrally by Schaeffler Corporation. In one word , they are another successful business model in Germany auto field.
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