Economy, Auto

Daimler Turns Down Geely Offer

Geely is seeking a tie-up with Daimler that includes establishing a jV to produce electric cars.Geely is seeking a tie-up with Daimler that includes establishing a jV to produce electric cars.

Daimler AG has rebuffed an offer from China’s Geely to take a stake of up to 5% via a discounted share placement due to long-held reluctance to see existing shareholdings diluted, people with knowledge of the discussions said.

A stake of that size would be worth as much as $4.5 billion at market prices, Reuters reported.

The two automakers met in Beijing in recent weeks at Geely’s behest. There, the Chinese firm, formally known as Zhejiang Geely Holding Group, offered to take a stake of between 3% and 5% if Daimler would issue new shares at a discount, the people said.

The German group declined the offer but told Geely, which also owns Swedish car maker Volvo, it was welcome to buy shares in the open market, they said. It was not immediately clear if Geely is interested in that option.

People with knowledge of Geely’s thinking said the company’s plans for a tie-up with Daimler included establishing a joint venture to produce electric cars and that it was hopeful it could still secure a deal in some form over the coming weeks.

A spokesman for Geely declined to comment. A spokesman for Daimler said the company was “very happy with our shareholder structure at present” but added that it would welcome new investors with a long-term interest in the company.

A stake of 5% would establish the Chinese group as Daimler’s third-largest shareholder behind the Kuwait Investment Authority and BlackRock, who hold 6.8% and 6% respectively, according to Reuters data.

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