Daimler AG to invest in China’s BAIC Motor for a 12 percent stake

February 4, 2013: Daimler AG and Beijing Automotive Group (BAIC) are to significantly deepen their already strong strategic partnership. As per a binding agreement signed on February 1, Daimler AG will invest in BAIC Motor, the passenger car unit of BAIC Group, ahead of an intention by BAIC Motor to launch an IPO in the future. Daimler’s investment will take place through the issuance of new shares corresponding to a 12 percent stake in BAIC Motor. A closing of the transaction is expected by the end of this year or early next year.

The agreement includes that Daimler will receive two seats on the Board of Directors of BAIC Motor. The two companies also agreed that BAIC will increase its stake in the production joint venture Beijing Benz Automotive Company (BBAC) by 1 percent to 51 percent and will thus be able to consolidate this JV within BAIC ahead of its IPO. At the same time, Daimler will increase its stake in the integrated sales joint venture Beijing Mercedes-Benz Sales Service Co. by 1 percent to 51 percent.

Dr. Dieter Zetsche, Chairman of the Board of Management Daimler AG and Head of Mercedes-Benz Cars: “Following our technical cooperation with BAIC Motor and the setup of our integrated sales company, we are now taking the next step in deepening our 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. It is also significant so that both companies can actively participate in the opportunities of the Chinese automotive market.”

Xu Heyi, Chairman of BAIC said: “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. At the same time, this will help Mercedes-Benz to boost its business performance in China.” Bodo Uebber, Chief Financial Officer of Daimler commented: “Through this strategic investment in BAIC Motor, we will be the first non-Chinese manufacturer to take a stake in a Chinese OEM. It also gives us the opportunity to be part of the growth of one of its major domestic participants. At the same time, our decision demonstrates the full support of our partner's intention to publicly list its shares in the future, further strengthening BAIC Motor's competitive position.”

Photograph: Daimler AG and BAIC formally signed the contract between the two companies in Stuttgart’s Mercedes-Benz Museum on February 1, 2013. From left: Hubertus Troska, member of the Board of Management of Daimler AG responsible for China, Bodo Uebber, member of the Board of Management of Daimler AG responsible for Finance & Controlling, Dr. Dieter Zetsche, Chairman of the Board of Management Daimler AG and Head of Mercedes-Benz Cars, Xu Heyi, Chairman BAIC Group, Zhang Xiyong, Deputy General Manager BAIC Group, Ma Chuanqi, Chief Financial Officer BAIC Group.