April 25, 2018 / 4:20 AM / 4 months ago

Hostile takeover? Daimler CEO says no fears about Chinese magnate Li Shufu

BEIJING (Reuters) - German car maker Daimler AG’s (DAIGn.DE) boss said on Wednesday there was no indication the firm’s largest shareholder, Chinese auto magnate Li Shufu, was planning a hostile takeover after he took a $9 billion stake in the firm earlier this year.

Daimler CEO Dieter Zetsche speaks during a world premiere for new Mercedes Benz A-Class L Sedan in Beijing, China, April 24, 2018. REUTERS/Damir Sagolj

Dieter Zetsche, Daimler’s chief executive, said Li, the head of Chinese carmaker Geely, had told the firm he had no intention to go beyond his current 9.7 percent stake in Daimler, which he announced in February.

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Zetsche added that he was not concerned about the firm’s top shareholder wrestling further control of the company, which owns carmaker Mercedes-Benz.

“We have no indication of plans for a hostile takeover, therefore we don’t need any specific plans (against one)”, he told reporters when asked about the matter during an event at China’s main auto show being held in Beijing.

Li’s deal for the stake in Daimler raised fears in Germany about the country’s most-prized assets falling into Chinese hands, especially because the deal had not triggered normal disclosure thresholds and so caught market insiders unaware.

Earlier this month Germany’s spy chief urged vigilance over increased moves by Chinese companies to invest in and acquire high-technology German companies, warning the loss of key technologies could harm the German economy.

Li, a well-connected entrepreneur, had used Hong Kong shell companies, derivatives, bank financing and carefully structured share options to keep the plan under wraps until, at a stroke, he become Daimler’s single largest shareholder.

Zetsche added the firm was not currently considering cooperation with Li or his company Geely. Daimler already has a Chinese joint venture partner BAIC (1958.HK).

Li and his firm Zhejiang Geely Holding control Sweden’s Volvo Cars, London black-cab maker LEVC as well as its own Hong Kong-listed unit Geely Automobile Holdings (0175.HK). It has also agreed to buy a $3.3 billion stake in Volvo Trucks.

Several major deals last year raised German sensitivities about multi-billion euro foreign takeovers, notably Chinese home appliance maker Midea Group 000333.SZ buying German robotics firm Kuka (KU2G.DE), and Hong Kong billionaire Li Ka-shing buying German metering firm Ista.

Reporting by Ilona Wissenbach; Writing by Adam Jourdan; Editing by Muralikumar Anantharaman and Darren Schuettler

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