In an unusual Spring Festival, on the afternoon of February 15, 2018, Geely Automobile’s CFO, Li Weifan, chose not to follow tradition by heading to the U.S. for the holiday. Instead, he spent New Year’s Eve with his father for the first time in 27 years. He shared this personal moment on his WeChat moments, reflecting a rare break from the usual routine. This event was just one of many highlights as the car electronics editor explored the broader story behind Geely’s bold move.
Behind Geely’s “flash sale†of Daimler shares lies a complex financial and strategic maneuver. Just days after the news broke, it became clear that Geely had successfully acquired 9.69% of Daimler through the secondary market, making it the company's largest shareholder. The deal, which involved nearly $9 billion, was made public when Daimler confirmed the transaction, sparking global interest.
The acquisition process began over a year earlier, in 2016, when Geely and Daimler first started discussions. Initially, the talks were kept confidential, with no official confirmation of the intent to acquire shares. However, by October 2017, the two companies had entered formal negotiations. Geely proposed that Daimler issue new shares to allow it to become a major shareholder, but this idea was rejected due to concerns about dilution and shareholder rights.
Instead, Geely turned to the secondary market, carefully acquiring shares without triggering regulatory alerts or causing stock price fluctuations. This required precise execution and strategic timing, highlighting the complexity of the operation.
The financing behind the deal came from a powerful consortium, including Industrial Bank and Morgan Stanley. While Geely maintained that the purchase was not a personal investment, it was supported by offshore funds, ensuring the transaction remained independent of domestic capital sources. Industry analysts noted that the deal offered strong financial returns, with a low price-to-earnings ratio and a solid dividend yield.
Beyond the financial benefits, the acquisition also aligned with Geely’s long-term industrial strategy. Although the official materials did not mention specific collaborations, Li Shufu emphasized the importance of partnership and innovation in the automotive industry. He believed that no single company could succeed alone in the face of rapid technological change, and that collaboration was key to capturing future opportunities.
From a business perspective, Daimler’s strengths in trucks, vans, and buses presented a significant gap for Geely to fill. These areas are crucial for expanding into international markets and diversifying its portfolio. While the exact future plans remain unclear, the next step will be whether Li Shufu can secure a seat on Daimler’s board of directors, depending on the company’s internal policies.
As Geely continues to grow and expand globally, its investment in Daimler represents a bold step forward, blending financial acumen with strategic vision. The story of this acquisition is far from over, and its impact on both companies is still unfolding.
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