German automaker Daimler has announced it's buying a stake in the passenger vehicle unit of its main Chinese partner, BAIC Motor. The move comes as the Chinese company eyes an initial public offering.
Vehicle maker of Germany announced on Friday it was buying a stake in the passenger car unit of Chinese partner BAIC Motor.
"Daimler and Beijing Automotive Group will significantly deepen their already strong strategic partnership," the German carmaker said in a statement.
Daimler said it would pay 640 million euros ($875 million) to secure a 12-percent stake in BAIC Motor with which it had manufactured Mercedes Benz cars.
The deal will make Daimler the first global auto brand to own a direct stake in a Chinese carmaker. All major automakers already have joint ventures with Chinese partners, but to date they've all avoided cross-ownership agreements.
"Our investment is a strong sign of the increased level of trust between our two companies and clearly emphasizes the long-term commitment to a joint, successful future," Daimler Chief Executive Dieter Zetsche commented.
The investment announcement came amid plans by BAIC Motor to go public. Daimler was reported to get two seats on the board of its partner firm. The German carmaker in 2012 posted a 4-percent rise in sales year-on-year, seeing well over 200,000 units leaving Chinese showrooms.
hg/kms (AFP, AP)