China to Become Daimler-Benz's No. 2 Shareholder

The maker of Mercedes-Benz luxury cars and industrial vehicles will sell a 5-10% stake to China’s sovereign wealth fund, making it the German automaker’s second largest shareholder, according to Germany’s Manager Magazine.

The deal with China Investment Corp (CIC) is intended to boost ties between Daimler and China as well as to consolidate the firm’s ownership structure to make it less attractive to hostile takeovers, according to Manager Magazine.

The investment deal may be linked to the joint venture that China’s Ministry of Commerce has approved between Daimler and Chinese automaker Foton to jointly produce heavy trucks powered by Daimler engines. The deal will lead to the transfer of key industrial technology to China.

Daimler Benz is Germany’s second biggest industrial firm by revenues. Along with BMW and Audi, it is also one of the world’s three leading luxury auto makers.