Daimler Rejects Geely’s Equity Bid

Daimler AG has rebuffed an offer from China’s Zhejiang Geely Holding Group to buy as much as 5% of the German carmaker, sources tell Reuters.

A 5% stake would cost about $4.5 billion and make Geely Daimler’s third-largest shareholder after the Kuwait Investment Authority (6.8%) and BlackRock (6%).

Reuters’ sources say Geely had hoped Daimler would issue new shares at a discount. They point out that the Chinese carmaker also could amass the stake, albeit more expensively, by buying Daimler shares on the open market.

Reuters notes that Geely is eager to gain access to Daimler’s expertise in electric vehicles. The news service’s sources say the company also hopes to launch an EV joint venture with Daimler.

In June Daimler said it would buy a minority position in Beijing Electric Vehicle Co., a unit of its current Chinese partner, BAIC Group. A month later Daimler and BAIC announced they would invest 5 billion yuan ($735 million) by 2020 on EV production in China.​​​​​​