Chinese Government Fund May Buy Daimler Shares

China Investment Corp., the country's sovereign wealth fund, may buy a 4%-10% stake in Daimler AG, according to state-owned newspaper People's Daily, which does not cite its sources.

Daimler declined to comment on the report. But CEO Dieter Zetsche has said the company would welcome Chinese investors. Analysts in China opine that such a sale would foster closer ties with Beijing.

Abu Dhabi sovereign wealth fund Aabar Investments, which had been Daimler's largest shareholder, sold its remaining 3.1% holding last year. Analysts speculate the move left the carmaker open to takeover attempts or pressure to spin off its commercial truck unit.

Germany's Manager Magazin said in late 2011 that Daimler had hired investment bankers to broker a share sale, with China Investment Corp. as the frontrunner.

Daimler's Mercedes-Benz brand has been lagging its luxury rivals the Chinese market. The company is shaking up the unit by installing a new top executive and streamlining distribution. Mercedes Cars also is expanding capacity and erecting a new engine plant and R&D center in China with joint venture partner Beijing Automotive Industry Co.