German Regulator to Review Li's Stake in Daimler
By Max Bernhard and Christian Grimm
BERLIN--Germany's market regulator is looking into whether Chinese billionaire Li Shufu complied with notification requirements in purchasing nearly 10% in car maker Daimler AG (DAI.XE), after Germany's economics minister expressed concern about the stake.
The financial watchdog's review of the investment by Mr. Li, chairman of China's Zhejiang Geely Holding Group Co., is a routine procedure, a BaFin spokeswoman said Monday.
The decision follows comments from German Economics Minister Brigitte Zypries, who raised the possibility that Mr. Li may have sidestepped notification regulations in amassing his 9.7% stake, valued at about $9 billion.
"One should look at this carefully," she said. German regulations call on investors to send notification when they cross the 3% and 5% ownership thresholds, which didn't happen in this case.
Over the past years, the German government has grown wary of Chinese investment in domestic companies, in some cases fearing the country could lose its high-tech edge. In 2016, it tried to thwart Chinese investors from buying robotics company Kuka AG (KU2.XE) by putting together a European counter-offer.
Ms. Zypries also raised concerns about potential competition issues among the auto makers in Mr. Li's ownership constellation, saying it is complicated for a company if "the competition was sitting at the table."
Zhejiang Geely controls Chinese auto maker Geely Automobile Holdings Ltd. (0175.HK), and also has a stake in truck maker AB Volvo (VOLV-B.SK), a competitor to Daimler's truck unit. The Chinese company also owns premium car maker Volvo Cars.
Earlier Monday, AB Volvo rescinded its proposal to reelect Volvo Cars Chief Executive Hakan Samuelsson to its board, citing competition concerns.
Mr. Li's investment in Daimler could give him a seat on the supervisory board and an insider's view on Daimler's Mercedes-Benz car brand. It remains unclear, however, whether the move is the first step in a more strategic alignment of Daimler and Geely Automotive.
The German government classified Mr. Li's purchase of the shares as a corporate decision and declined to comment on it. Daimler itself said it welcomed the new shareholder.
Andreas Kissler in Berlin contributed to this article.
Write to Max Bernhard at Max.Bernhard@dowjones.com; @mxbernhard
(END) Dow Jones Newswires
February 26, 2018 12:55 ET (17:55 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.