German automaker Daimler has acquired a 12% stake in its Chinese partner BAIC Motor, the passenger car unit of Beijing Automotive Group (BAIC Group).
This transaction marks the first investment by a non-Chinese automotive company in a Chinese OEM.
The closing of the transaction follows the signing of the investment agreement earlier this year and the approval by the relevant Chinese authorities.
Daimler's investment will take place through the issuance of new shares corresponding to a 12% stake in BAIC Motor.
With this move, Daimler is showing its strong support for BAIC Motor's intention to launch an initial public offering (IPO) in the future.
As part of the deal, BAIC will increase its stake in the production joint venture Beijing Benz Automotive (BBAC) by 1% to 51% and Daimler will increase its stake in the integrated sales joint venture Beijing Mercedes-Benz Sales Service (BMBS) by 1% to 51%.
This deal will offer two seats for Daimler on BAIC Motor Board of Directors, to be held by Daimler Greater China board of management member Hubertus Troska and Daimler board of management member and chief financial officer Bodo Uebber.
Daimler board of management chairman and Mercedes-Benz Cars head Dieter Zetsche said: "Going forward, the cooperation between Daimler AG and BAIC Motor will contribute towards increasing our footprint in China and so enable us to actively participate even better in the huge opportunities the Chinese automotive market offers."
BAIC Group, which is one of China's largest automakers, sold over 1.7 million vehicles in 2012.
