China's Geely buys shares in Daimler to develop electric car technology

Chinese automaker Geely has purchased a stake in German car manufacturer Daimler, as the company seeks out cooperation to develop its electric car technology.

The Geely 7151 CK sedan is shown at Cobo Hall at the North American International Auto Show in Detroit, January 9, 2006. [File Photo: AP/Rob Widdis]

The exact size of the stake purchased by Geely is unknown; however, a report from Reuters says it may be below three percent as Geely has not made the regulatory disclosure required in Germany for trades over this amount.

Sources say Geely is interested in Daimler's electric battery technology and may wish to pursue an electric car joint venture in Wuhan, in central China's Hubei Province. A spokesperson for Geely said they are not aware of any such plans.

People familiar with the deal told Reuters that in November last year, Daimler rejected an offer from Geely to purchase a five percent stake in the company via a discounted share placement valued at 4.5 billion US dollars. It has been reported that parent company Mercedes-Benz did not want to see the existing stockholder shares diluted.

According to the Reuters report, Daimler said it welcomed investment from long-term shareholders and would disclose significant changes to its ownership.

Daimler CEO Dieter Zetsche attends the company's annual news conference in Stuttgart, Germany, on February 1, 2018. [Photo: AP]

Daimler CEO Dieter Zetsche said at an event on Tuesday that he had no information about the share purchase by Geely.

In 2014, Daimler teamed up with Chinese carmaker BYD to develop electric vehicle brand Denza.

Geely owns London taxi manufacturer LEVC as well as stakes in Volvo trucks and sport car brand Lotus.