Daimler Buys 12% Stake in China’s BAIC Motor

Daimler AG confirms it has agreed to buy 12% of BAIC Motor, the carmaking unit of China's Beijing Automotive Group. The companies expect to finalize the deal, which was predicted by media reports earlier in the week, by early 2014.

The pact will give Daimler two seats on the board of directors of BAIC Motor and increase the German company's influence in China.

Separately, BAIC will raise its stake in the Daimler-BAIC joint venture, Beijing Benz Automotive Co. from 5,0% to 51%. The partnership assembles Mercedes-Benz C- and E-Class sedans and GLK SUVs.

Gaining a majority position will enable BAIC Motor to consolidate the joint venture ahead of an expected initial public stock offer later this year or in early 2014. BAIC hopes to raise about $1.6 billion to fund the development vehicles under its own brand.

Simultaneously, Daimler will raise its stake in the sales JV operated by the two companies to 51%.