Daimler to Buy Stake in Chinese Partner

Daimler AG will sign a deal to acquire a 10%-20% stake in its Chinese joint venture partner BAIC Motor Co. on Friday in Germany, according to news reports.

The purchase would give the Stuttgart-based company greater influence in China as it scrambles to boost the sub-par performance of its Mercedes-Benz Cars unit there.

In exchange, Daimler will sell BAIC a 1% stake their 50:50 joint venture, Beijing Benz Automotive Co., which builds the Mercedes-Benz C- and E-Class sedans and GLK SUV.

Becoming majority owner would allow BAIC Motor to consolidate the venture's results with its own, thus making the carmaker more attractive to investors in an upcoming initial public offering.

BAIC declared last year it aims go public in 2013 to raise about 10 billion yuan ($1.6 billion) to fund the development of its own brand. Nearly all BAIC's current volume comes from its ventures with Daimler and Hyundai Motor Co.

News reports earlier this month suggested the IPO might be delayed until early 2014 to allow time to restructure BAIC Motor.