Daimler eyes stake in unit of China's BAIC
FRANKFURT (Reuters) -- Daimler may invest in the passenger-car unit of its Chinese partner, BAIC Group, in a bid to overcome its weakness the world's largest car market, three people close to the plans said.
"When BAIC Motor is floated, Daimler may take a stake of 10 to 20 percent," one of the sources said today, adding the size of the stake depended on discussions with its Chinese partner.
Daimler declined to comment while BAIC, China's fifth-largest automaker, was not immediately available for comment.
The chairman of state-controlled BAIC, Xu Heyi, told Reuters in September that it aims to list its passenger-car subsidiary, BAIC Motor, in 2013.
The company hopes to raise about 10 billion yuan ($1.6 billion).
Two sources close to the transaction said BAIC Motor is expected to be listed in Hong Kong this year, targeting a volume of at least $1 billion, while other sources cautioned that an initial public offering (IPO) may be delayed until next year.
Goldman Sachs and Morgan Stanley have been mandated to organize the listing, the sources said.
A BAIC investment may help Daimler to get its ailing China business back on track. While China has become Daimler subsidiary Mercedes-Benz's No. 3 market globally after Germany and the United States, the premium carmaker trails rivals BMW and Audi in the country.
Slow sales in China have contributed to Mercedes' drop to to third in the global ranking of top-selling premium brands behind No. 2 Audi and leader BMW.Contact Automotive News