German automotive manufacturer Daimler has acquired 12% stake in the passenger car unit of its Chinese partner Beijing Automotive Group (BAIC) for $875m.
The acquisition will help the company in expanding presence in the world's biggest automotive market, while the binding agreement will also provide the German auto maker with two seats on the Board of Directors of BAIC Motor.
Daimler Board of Management chairman, Mercedes-Benz Cars head Dr. Dieter Zetsche said that following the technical cooperation with BAIC Motor and the setup of integrated sales company, the firm is now taking the next step in deepening its relationship even further.
"Our investment is a strong sign of the increased level of trust and cooperation between our two companies and clearly emphasizes the long-term commitment to a joint successful future of our two companies," Zetsche said.
"It is also significant so that both companies can actively participate in the opportunities of the Chinese automotive market".
Additionally, BAIC will increase its share in production joint venture Beijing Benz Automotive (BBAC) to 51%, allowing BAIC to merge operations prior to its initial public offering (IPO), in return, Daimler plans to raise its stake in the incorporated sales joint venture Beijing Mercedes-Benz Sales Service to 51%.
BAIC chairman Xu Heyi said that the partnership between BAIC and Daimler has entered into its best phase ever, with further deepened cooperation in accordance with the mutual interests and development plans between both companies.
"Daimler's investment in BAIC's stake will go a long way in accelerating the development of BAIC's self-owned brand in terms of capital, technology, management, and brand," Heyi said.
"At the same time, this will help Mercedes-Benz to boost its business performance in China."
