Daimler and its Chinese partner BAIC plan to invest nearly $2 billion in a cutting edge factory in China, highlighting their relationship as competing Geely makes a surprise swoop on the German automaker.
The two will invest over 11.9 billion yuan ($1.88 billion) in improving a plant to develop premium Mercedes-Benz vehicles consisting of electric vehicles, BAIC said in a filing to the Hong Kong Stock Exchange dated Friday and validated by Daimler on Sunday.
The chairman of Chinese automaker Geely stated late on Friday he had purchased a nearly 10 percent stake in Daimler, in a $9 billion bet to access the Mercedes-Benz owner’s innovation.
The move presents a difficulty to Daimler, which in addition to its Chinese collaboration with BAIC Motor Corporation has an industrial alliance to develop cars and trucks with Renault-Nissan, which owns a 3.1 percent stake in Daimler.
Geely’s Chairman Li Shufu, who quietly developed the 9.7 percent stake, is now expected to meet Daimler executives in Stuttgart on Monday, a source acquainted with the matter said, and hopes to meet top German government officials in Berlin.
His approach contrasts with that of former Chinese investors in German technology companies – such as Midea, which purchased Kuka or Weichai, which purchased a large stake in Kion – who have had the tendency to participate in prolonged consultation with stakeholders.
Berlin stated it saw no need to take any action over Geely’s purchase, either in terms of competition rules or of foreign investment rules.