Daimler has asked Goldman Sachs to help it observe boosting its stake in Chinese automaker BAIC Motor, its main China joint venture partner, two people with knowledge of the matter stated.
A deal would be only the second since the globe’s biggest auto market relaxed foreign ownership rules in 2018.
Daimler’s competitor BMW became the first to take benefit of the modifications when it agreed in October to purchase control of its venture with Brilliance China Automotive Holdings for 3.6 billion euros ($4.08 billion).
Caps on foreign ownership earlier prevented overseas automakers from controlling any Chinese maker or joint venture with foreign peers. In the previous year, those limits were removed for companies making fully electric and plug-in hybrid vehicles, which will be followed in 2020 by the elimination of limits on makers of commercial vehicles such as trucks and buses.
In 2022, the limits will be lifted on the broader vehicle market. BMW’s deal with Brilliance China will only take effect then.
Daimler’s talks with BAIC are at an early stage and its prepartion to boost the stake in BAIC’s Hong Kong-listed entity has not been finalized and could change later, cautioned the people, who refused to be identified as the information is confidential.
Daimler has 30.4 percent of BAIC’s Hong Kong-listed shares, accounting for a 9.55 percent overall stake in its Chinese partner, as per BAIC’s June 2018 interim report.
It remains unclear whether Daimler would seek a majority stake in BAIC, that has a current market
Daimler refused to comment on speculation regarding its partnerships. Beijing-based BAIC did not replied to a request for comments. Goldman refused to comment.