February 6, 2018 / 10:59 AM / 10 months ago

China's Geely buys shares in Germany's Daimler - sources

FRANKFURT/BEIJING, Feb 6 (Reuters) - Chinese carmaker Geely has bought shares in German car and truck maker Daimler , two people familiar with the matter told Reuters, as the Chinese owner of Volvo cars seeks to strike an alliance over electric cars technology.

The size of the stake remains unclear but is likely to be below 3 percent, as that level would require Geely to make a regulatory disclosure in Germany.

It was also unclear whether Geely had sought to buy further shares from existing shareholders in Daimler.

In November, sources had told Reuters that Daimler, the parent company of Mercedes-Benz, turned down an offer from Geely to take a stake of up to 5 percent via a discounted share placement.

At the time, Daimler declined to issue new shares because it did not want to see existing stockholders diluted, sources with knowledge of the talks had said.

Now sources said that Geely has opted to build a stake by buying existing shares.

“Geely has opted mainly to show their seriousness and to impress on Daimler folks that they are not going away,” one of the sources, who declined to be named, said.

A spokesman for Geely declined to comment.

Daimler on Tuesday reiterated that it would welcome interest from long-term shareholders and added that any significant changes to its shareholder structure would be published on its website.

People with knowledge of Geely’s thinking had said the company was keen to access Daimler’s electric car battery technology and wanted to establish an electric car joint venture in Wuhan, the capital of Hubei province.

Carmakers in China have come under pressure to ramp up production of battery electric and hybrid vehicles ahead of tough new quotas to be imposed by Beijing, which wants to reduce urban smog and lower the country’s reliance on oil. (Reporting by Edward Taylor and Norihiko Shirouzu; Additional reporting by Arno Schuetze and Hans Seidenstuecker; Editing by Maria Sheahan)

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