Geely completes black cab takeover

Daimler invests in BAIC

Meanwhile, in addition to the Chinese automakers' frequent acquisitions of ailing foreign players, global vehicle makers are also finding opportunities in the world's largest automobile market through investments in Chinese OEMs.

On Friday, German auto conglomerate Daimler AG signed a binding agreement with Beijing Automotive Group to invest in BAIC Motor, the passenger-car unit of the BAIC Group through the issuance of new shares corresponding to a 12 percent stake of the latter.

The move comes ahead of a planned initial public offering by BAIC Motor in the near future.

Daimler also becomes the first foreign manufacturer to take a stake in a Chinese automaker.

However, the deal is still subject to regulatory approval and is only expected to close by the end of this year or early next year.

The agreement includes a clause stating that Daimler will get two seats on BAIC Motor's board of directors. The two companies also agreed that BAIC will increase its stake in their production joint venture Beijing Benz Automotive Co by 1 percent to 51 percent and will thus be able to consolidate the joint venture within BAIC ahead of the IPO.

At the same time, Daimler will increase its stake in the newly integrated sales joint venture Beijing Mercedes-Benz Sales Service Co by 1 percent to 51 percent.

"Following our technical cooperation with BAIC Motor and the setup of our integrated sales company, we are now taking the next step in deepening our relationship even further," said Dieter Zetsche, chairman of the management board of Daimler and head of Mercedes-Benz Cars.

"Our decision demonstrates the full support of our partner's intention to publicly list its shares in the future," Zetsche said.

Xu Heyi, chairman of BAIC said: "Daimler's investment in BAIC's stake will go a long way in accelerating the development of BAIC's self-owned brand in terms of capital, technology, management, and brand."

Mercedes-Benz Cars has already brought its complete product portfolio to the Chinese market. It sold around 210,000 vehicles in 2012, and plans to add 50 new dealers to expand its current network of 220 this year.

lifangfang@chinadaily.com.cn

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