The Spring Festival of 2018 was quite different from usual. On the afternoon of February 15, 2018, at 7 p.m., Geely Automobile’s CFO, Li Weifan, chose not to follow tradition by traveling to the U.S. for the holiday. Instead, he shared on his WeChat Moments: "For the first time in 27 years, I spent New Year's Eve with my father." This moment was later highlighted in a piece by the car electronics editor.
[Image: Geely buys 9.69% stake in Daimler – Daimler commercial vehicle is a short board of Geely]
Behind Geely's "flash sale" of Daimler shares lies a complex story. A few days after the deal, it became clear that this was no ordinary transaction. Kyrgyzstan, through the secondary market, had swiftly acquired 9.69% of Daimler's shares. The news broke when Daimler confirmed the change in ownership, making Geely its largest shareholder.
On February 24, around 3 p.m., Geely officially announced on its WeChat platform that it had acquired 9.69% of Daimler AG's voting shares. While the details of the transaction remain under regulatory review, the fact that Geely now holds such a significant stake has sparked global interest.
Despite the media attention, many aspects of the deal remain unclear. However, the partnership between Geely and Daimler actually began over a year earlier. In 2016, high-level sources close to Geely revealed that initial discussions had taken place in Beijing, though they were kept highly confidential. At the time, there was no indication that the talks would lead to an acquisition.
In October 2017, formal negotiations began. Geely proposed that Daimler issue new shares so that Geely could become a shareholder, but the proposal was rejected. From Geely’s perspective, a private placement would have been more cost-effective and discreet, but Daimler was concerned about diluting existing shareholders’ interests, which is a common practice in Western markets.
Undeterred, Li Shufu proceeded with a purchase through the secondary market, eventually becoming Daimler’s largest shareholder. Acquiring such a large stake required careful planning to avoid triggering market volatility or regulatory scrutiny.
The total value of the transaction was estimated at $9 billion. According to reports, the funds came from an overseas consortium led by Industrial Bank and Morgan Stanley, with the latter providing the majority of the capital. While Geely claimed that the funds were sourced from overseas without using Chinese capital, the exact structure of the deal remains undisclosed.
From a financial standpoint, the investment appeared attractive. Daimler reported strong results in 2017, with a record net profit of 10.86 billion euros and a dividend per share of 3.65 euros. For Li Shufu, the acquisition wasn’t just about returns—it was part of a broader strategic vision.
Geely aims to expand globally and fill gaps in its own capabilities. While Daimler’s luxury car division aligns with Geely’s current strengths, its truck, van, and bus businesses are areas where Geely lacks expertise. By acquiring a stake in Daimler, Geely could gain access to these segments and enhance its international profile.
However, the next challenge is whether Li Shufu will be able to join Daimler’s board of directors. While Daimler has expressed willingness to engage in further discussions, the final decision depends on the company’s internal rules and governance structure. Whether this move leads to deeper collaboration between the two companies remains to be seen.
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