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TEHRAN, November 29 - Daimler AG (DAIGn.DE) has rebuffed an offer from China’s Geely to take a stake of up to 5 percent via a discounted share placement due to long-held reluctance to see existing shareholdings diluted, people with knowledge of the discussions said.
TEHRAN, Young Journalists Club (YJC) - Daimler AG (DAIGn.DE) has rebuffed an offer from China’s Geely to take a stake of up to 5 percent 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.
The two automakers met in Beijing in recent weeks at Geely’s behest. There, the Chinese firm, formally known as Zhejiang Geely Holding Group [GEELY.UL], offered to take a stake of between 3 percent and 5 percent 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 per cent would establish the Chinese group as Daimler’s third-largest shareholder behind the Kuwait Investment Authority and BlackRock, who hold 6.8 percent and 6 percent respectively, according to Reuters data.
Daimler has a long-established joint venture with Chinese carmaker BAIC Motor Corp (1958.HK), which its spokesman described as “our most important partner in China.” This month it announced plans to invest at least 5 billion yuan ($757 million) in electric battery and vehicle production with BAIC in China. It also has another tie-up with BYD, a Chinese automaker backed by Warren Buffett.
Source:Reuters
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