BAIC, Daimler Ready to Finalize Equity Deal

Daimler AG and BAIC Motor Co. will sign a new strategic cooperation agreement on Tuesday to complete Daimler's plan to buy 12% of the Chinese carmaker.

Daimler signed a binding agreement in February to buy the stake in BAIC Motor for €640 million ($863 million). The German company also will gain two seats on BAIC's board.

Under terms of the February agreement, Daimler and BAIC will adjust the ownership in their existing sales and production joint ventures to give Daimler a 51% stake in the former and BAIC a 51% stake in the latter.

Daimler's investment will help BAIC Motor develop its own car brand and presumably give it a stronger foothold in the Chinese market. Analysts said earlier this year that BAIC is likely to launch an initial public offering in 2014.