London black cab maker Geely sees shares surge after buying $9bn stake in Daimler

Chairman Li Shufu adds the German multinational to his growing portfolio of carmakers

Donny Kwok
Monday 26 February 2018 10:09 GMT
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Mr Li now owns Volvo Cars, LEVC and a stake in Malaysian carmaker Proton
Mr Li now owns Volvo Cars, LEVC and a stake in Malaysian carmaker Proton (Reuters)

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Geely shares jumped on Monday after its chairman Li Shufu revealed he had built a $9bn (£6.4bn) stake in Daimler, giving him major leverage as he attempts to persuade the German carmaker to cooperate on tech.

The 9.7 per cent holding makes Mr Li Daimler’s biggest shareholder, and puts the owner of Mercedes-Benz in a quandary as it already has a partnership with China’s BAIC Motor Corporation, with the two unveiling a plant investment of almost $2bn on the weekend.

Mr Li is expected to meet Daimler executives in Stuttgart on Monday, and hopes to meet top German officials in Berlin. Germany has said there is no need to take action on the stake owned by Mr Li.

Geely’s stock surged 8 per cent, buoyed by hopes of access to Daimler’s technology – which would help it compete in a fast-shifting market being disrupted by electric cars and autonomous driving.

Its parent Zhejiang Geely Holding said on Saturday there were no plans to raise the stake “for the time being”.

Geely has been expanding rapidly. The parent firm owns Volvo Cars, LEVC, the maker of London’s black cabs, and last year took a majority stake in sports car maker Lotus, a 49.9 per cent stake in Malaysian carmaker Proton, a $3.3bn stake in Volvo Trucks and control of flying car start-up Terrafugia.

Among the 36 analysts that cover Geely, the average rating on the shares is “buy” with 27 recommending “strong buy” or “buy”.

Reuters

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