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Daimler interested in boosting BBAC stake: Bloomberg
Posted on Wednesday, 05 December 2018 11:55
Daimler may change the status quo of a collaboration with BAIC Motor by acquiring an additional 16.0 per cent in Beijing Benz Automotive (BBAC) for a value estimated by a banker at EUR 2.30 billion to EUR 3.00 billion, Bloomberg reported. People with knowledge of the matter told the news provider the German partner has already flagged up the suggestion to boost its 49.0 per cent in the Chinese joint venture to 65.0 per cent. However, discussions are purely tentative and an agreement may not even be reached. When contacted by Bloomberg, Daimler declined to comment on the mooted talks while BAIC rejected the rumour outright, saying “there is no such thing”. The two companies confirmed they are happy with their collaboration set-up over Beijing Benz Automotive. Following Bloomberg’s report, Reuters noted an equity analyst at Jefferies in Hong Kong said the cooperation between the two is closer than that of BMW and Brilliance. As such, the stock ratio of the joint venture, which produced 427,000 vehicles for the German partner last year, is unlikely to change in the short term. The news comes on the heels of BMW announcing it will take control of the 50:50 sino-foreign equity joint venture formed in 2003 with Brilliance China Automotive Holdings. It will acquire 25.0 per for CNY 29.00 billion (EUR 3.64 billion) to increase its interest to 75.0 per cent now that China intends to relax foreign ownership restrictions in the automotive sector. Along with owning a 49.0 per cent of BBAC, Daimler also has a 9.6 per cent stake in BAIC, though this was down from 10.1 per cent earlier this year due to an equity dilution by the Chinese partner. © Zephus Ltd