Li Shufu, chairman of the Chinese car manufacturer Geely, has secretly increased his stake in Daimler to nearly 10 percent in a $9 billion bet that he will gain access to the technology of the German company, Reuters reports, citing regulatory filings released on Friday.
Vision of sharing and pooling strengths
Geely is the largest privately-owned Chinese car manufacturer and now the largest shareholder of Daimler.
Geely stated on Saturday that they currently have no plans to further increase their stake, but will seek an alliance with Daimler, which is developing electric and autonomous vehicles, in response to challenges from new competitors such as Tesla, Google, or Uber.
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– No current player in the industry can win the battle against external invaders without friends. To achieve and impose technological leadership, you must adopt new ways of thinking about sharing and pooling strengths. My investment in Daimler reflects that vision, Li said.
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The expansion of Zhejiang Geely Holding in practice looks impressive. It owns Volvo Cars and LEVC, which produces London’s iconic black taxis. Last year, it acquired a majority stake in the sports car manufacturer Lotus and 49.9 percent of the Malaysian manufacturer Proton. There is also a $3.3 billion stake in Volvo Trucks and control over the startup Terrafugia, which is developing a flying car.
Geely seeks access to manufacturers with advanced technology as it believes that ultimately only two or three manufacturers will survive in the Chinese car market. Li believes that satellites and data transmission will become increasingly important for the automotive industry and sees potential in Daimler, which is developing fast internet connections on the road to autonomous vehicles, reveals a source familiar with his thinking.
Infiltration
Geely requested Daimler to issue shares last November, but the German company rejected the offer on the grounds that it did not want to dilute their value for existing shareholders. Li then changed tactics and ‘secretly’ acquired 9.69 percent of shares now worth about $9 billion.
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– Daimler is pleased to announce that with Li Shufu, it can gain another long-term oriented shareholder who believes in the strength of Daimler’s innovations, strategies, and future potential. Daimler knows and appreciates Li Shufu as a Chinese entrepreneur with exceptional knowledge and a clear vision of the future, an entrepreneur with whom it can constructively discuss changes in the industry, Daimler’s response states.
