Fight for the largest shareholder! BAIC wants to increase its stake in Daimler to 9.9%

Published: Sep 10, 2020 08:37

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SMM: recently, there are media reports that BAIC plans to increase its stake in Daimler Group by buying shares in the secondary market, with a total shareholding of 9.99%, surpassing Geely to become Daimler's largest shareholder. Before that, Geely took the lead in BAIC, taking the lead in buying a 9.69% stake in Daimler and becoming Daimler's largest single shareholder.

In fact, BAIC and Daimler have always coveted each other's stakes.

As early as July 2019, BAIC bought a 5 per cent stake in Daimler for 20 billion yuan, making it its third-largest shareholder. In exchange, BAIC will also give up its stake in Beijing Mercedes-Benz.

A few days ago, it was reported that Daimler was preparing to restart negotiations with BAIC to take a 16 per cent stake from BAIC in order to increase its share ratio in Beijing Mercedes-Benz from 49 per cent to 65 per cent.

In the second quarter of this year, China was the only market in which Daimler achieved year-on-year revenue growth, and China is now its well-deserved profit cow. At the same time, Beijing Mercedes-Benz is also a major profit contributor to BAIC, with a loss of 1.835 billion yuan in its independent business in the first half of the year, while Beijing Mercedes-Benz's net profit is as high as 20 billion yuan. From this point of view, Daimler's news of increasing its stake in Beijing Mercedes-Benz is not groundless.

On the other hand, in terms of sales, Galaxy data show that Beijing Mercedes-Benz sold 57000 vehicles in July, with a cumulative sales of 327100 from January to July.

At present, Beijing Automobile Co., Ltd. (BAIC), Daimler AG and its wholly-owned subsidiary Daimler Greater China Investment Co., Ltd. hold 51%, 38.66% and 10.34% shares of Beijing Mercedes-Benz Motor Co., respectively. That is, the share ratio of BAIC to Daimler is 51:49.

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Beijing Mercedes-Benz equity relationship chart; picture source, Sky Eye check screenshot

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