Geely chairman builds US$9 billion stake in Germany's Daimler

Daimler's Need For An Anchor       The Mercedes Benz owner has very few strategic shareholders              Source Bloomberg

Li Shufu, chairman of Chinese carmaker which also owns Volvo, says he now has a 9.69% stake in German carmaker.

The German automaker announced the news in a regulatory filing on Friday. The founder and owner of Geely - the company which has prestigious brands like Volvo, Polestar, Lynk & Co., and Lotus under it - has acquired a $9 billion stake in Daimler. Currently, sovereign wealth fund Kuwait Investment Authority owns a 6.8% stake in Daimler, while automotive alliance Renault-Nissan holds a 3.1% stake.

Daimler declined to comment while Zhejiang Geely did not immediately respond to a request for comment.

Daimler issued a brief statement confirming that Li Shufu acquired 9.69% (103,619,340 shares) of the company.

Li has been working to acquire an array of global automotive holdings and turn Geely into the dominant player in China. It is the owner of Volvo cares, LEVC, the black cabs of London maker, and in 2017 took a majority share in Proton the Malaysian automaker, a stake of $3.3 billion in Volvo trucks and control of Terrarfugia the flying vehicle start up business. While Daimler said the move isn't a prelude to a spin-off of any of the businesses, some investors have called on the company to consider an eventual split on the back of the clearer delineation between the units.

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Daimler overtook homegrown rival BMW to become the world's largest luxury vehicle maker by unit sales in 2016, helped by a broad refresh of its model range and powerful sales growth in China.

According to sources with close knowledge of the acquisition, the pricey purchase makes Geely the largest investor in the German automaker.

Geely itself is no stranger to the European vehicle business, having bought Sweden's Volvo in 2010.

BMW is controlled by the Quandt-Klatten family, whose billionaire siblings boosted their personal holdings in the second-largest luxury carmaker this year after equally dividing their late mother's stake.

Daimler in the past has denied reports that it was negotiating an investment deal with Geely, but has said it would not be opposed to the Chinese company buying up shares on the open market.

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