Daimler and Beijing Automotive Group (BAIC) have strengthened their ties with Daimler AG deciding to invest in BAIC Motor car unit of BAIC group. Through the investment, Daimler will now control a 12% stake of BAIC constituted by issuance of shares as also seats for two members on the Board of Directors.
Both companies have decided to increase their stake in others companies by 1% to 51% thereby providing a suitable base for the initial public offering. Contract between two companies has been signed with Daimler’s shareholding rights left in balance depending on the outcome of the BAIC board decision.
The investment is the first time an international company has procured stake in a Chinese based original equipment manufacturer. BAIC is one of China’s largest automakers and it had sold over 1.5 million vehicles in 2011.