China’s Geely has indirectly bought a 9.69% stake in Daimler, worth $9bn (€7.2bn, £6.4bn).

Rather than through Geely itself, the stake was bought through Tenaclou3 Prospect Investment, an investment vehicle from Geely chairman Li Shufu. Li already held a stake below the notifiable threshold.

Daimler said that with Li, the company “could win another long-term orientated shareholder, which is convinced by Daimler’s innovation strength, the strategy and the future potential”.

Geely, owner of Volvo Cars and London black cab maker LVEC, had asked Daimler to issue new shares in November, as a way of accessing the German group’s electric powertrain technologies. However, Daimler declined the request at the time, reportedly not to dilute existing shareholders.

Following the acquisition of the 10% stake last week, a source close to Geely said that Li was now looking into Daimler because of the German manufacturer’s development efforts in connected cars, on top of electric engine capabilities.

Although Geely has been experimenting in shared mobility in China, it lacks a fleet or leasing division. Daimler, meanwhile, expanded in the fleet segment through the acquisition of Athlon from DLL last year.

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The German government said it would not veto Li’s stake increase in Daimler.
Truckmaker Volvo, meanwhile, said that it would not back the reappointment of Volvo Cars chief executive Hakan Samuelsson to its board, citing competition concerns. Volvo Cars bought a 8.2% stake in the truckmaker from investors Cervian Capital in December.

In related news, Daimler said on Monday it would intensify its collaboration with Chinese state-owned carmaker BAIC, a competitor to Geely.

Daimler and BAIC said they would invest RMB 11.9bn (£1.3bn, €1.5bn) in their existing joint venture, Beijing Bez Automotive (BBAC), in order to boost the Mercedes-Benz supply chain in China. Mercedes-Benz also has an electric car research and development center in China.

Markus Schäfer, member of the divisional board of Mercedes-Benz Cars, said: “Globally, our plants run at full capacity, which is why we need further production facilities around the globe.

“BBAC is an integral part of our global production network of Mercedes-Benz Cars. With the new production location and our battery production planned in Beijing, we are progressing well with our electric initiative.”