Daimler takes 12% stake in China's BAIC

  • 04-Feb-2013 08:26 EST

Sealing the deal are Dr. Dieter Zetsche (left), Chairman of the Board of Management, Daimler AG; and Xu Heyi, Chairman BAIC Group.

Daimler AG will take a 12% stake in BAIC (Beijing Automotive Group) as the latter prepares to launch an initial public offering (IPO). That aspect of the deal announced Feb. 1 is expected to be concluded by the end of 2013 or early in 2014, subject to government approvals. It would mark the first instance of a non-Chinese automotive company taking a stake in a Chinese OEM. Daimler would get two seats on the BAIC Board of Directors. In another aspect of the agreement, BAIC will increase its stake in a production joint venture between the companies called Beijing Benz Automotive Co. (BBAC) by 1% to 51%. This will enable BAIC to consolidate the joint venture prior to its IPO. BBAC has been producing Mercedes-Benz passenger cars since 2006. In addition, Daimler will increase its stake in the integrated sales joint venture Beijing Mercedes-Benz Sales Service Co. by 1% to 51%. Not involved in the deal is another Daimler and BAIC joint activity called Beijing Foton Daimler Automotive Co., Ltd., which has been jointly manufacturing BAIC's Auman-branded medium- and heavy-duty trucks since mid-2012. BAIC Group sold over 1.5 million vehicles in 2011.

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