Geely to take stake in Daimler after all?

The company is resorting to buying shares on the open market, according to Chinese media outlets.

China-based Geely recently tried buying a five-percent stake in Mercedes-Benz parent company Daimler through a discounted share placement. Officials from the German company rejected the offer, inviting Geely to purchase shares on the open market instead. Chinese media outlets report that's exactly what it will do.

Geely, whose growing portfolio of brands includes Volvo, Polestar, Terrafugia, Proton, Lotus, and The London Taxi Company, plans to buy a stake in Daimler in the coming weeks. State-owned China Central Television (CCTV) learned the auto-maker will invest about $4.73 billion to buy between three and five percent of Daimler.

Neither party has commented on the report. If it's accurate, and if Geely manages to secure a five-percent stake, it would become Daimler's third-largest shareholder. Settling for a three-percent stake would place it about on par with the Renault-Nissan Alliance as the group's fourth-largest shareholder.

Why Geely so badly wants a slice of Daimler remains to be seen. Some analysts argue it's looking for access to foreign markets but that doesn't make sense considering it already owns and controls Volvo, among other European companies. Others suggest, with a tinge more plausibility, that it wants access to the battery-electric technology Mercedes is developing for its EQ sub-brand, though that's also strange because Volvo is near the head of the pack when it comes to electrification.

Stay tuned for more on this developing story.

Photo by Ronan Glon.