HONG KONG/FRANKFURT/BEIJING (Reuters) – Daimler (DAIGn.DE) is seeking to buy a majority stake in its Chinese operations, three people familiar with the matter told Reuters, after initial efforts to raise its stake failed and as Chinese investors tighten their grip on the German carmaker.
Daimler’s moves come at a time of heightened tension between Berlin and Beijing as German lawmakers debate whether to bar China’s Huawei from local 5G networks and as German companies look to ease Chinese ownership restrictions.
These key decisions need at least 75% of votes cast at an annual general meeting, giving any shareholder with a 20% stake a blocking minority. At Daimler’s 2019 annual general meeting, only 52.91% of the company’s share capital was represented.
Daimler held talks with BAIC in 2018 about increasing its ownership of the China joint venture, but the talks petered out, prompting Daimler’s management to ask Goldman Sachs to explore ways to increase its 9.55% stake in BAIC Motor.
In 2018 Beijing started easing foreign ownership rules, allowing German carmaker BMW (BMWG.DE) to buy a 75% stake in its joint venture with Brilliance China Automotive Holdings Ltd (1114.HK) by 2022, when foreign firms will be permitted to control a non-electric passenger car company in China, prompting Daimler to pursue similar ambitions.
CHINESE INFLUENCE
Daimler has urged the German government to press Beijing to ease ownership restrictions to ensure a “level playing field,” just as China’s ambassador to Germany warned Berlin not to block China’s Huawei from supplying German telecoms equipment.
The United States, which is embroiled in a global trade dispute with China, has urged German chancellor Angela Merkel to exclude Huawei from mobile equipment auctions on security grounds.
Huawei says it is an independent company and dismisses such concerns as baseless attempts by the United States to damage its business and reputation.
