Mar 02, 2018 Geely, Daimler, Volvo Trucks, automotive, economy, commercial vehicles, automakers,
Geely Group revealed just days ago that it had purchased a 9.7 percent stake in Daimler, following a report in Bloomberg that the Hangzhou-based company was poised to become the largest investor in the German automaker.
According to Bloomberg, “the collar trades – which are used in a hedging strategy that requires puts and call options of the same size and with the same expiration - allowed Chinese billionaire Li Shufu’s Geely Group to build up the stake quickly, while potentially avoiding breaching German rules that require shareholders to disclose holdings exceeding 3 percent”.
The report also confirmed that the German Chancellor Angela Merkel had told the press that Bafin, a financial regulator, was reviewing whether there were “any gaps in the transparency of reporting requirements” tied to Li’s stake in Daimler. “Beyond that, we’re open to trade partners and don’t immediately see any violations,” she said.
“The collar trades reduce Li’s potential losses from a decline in Daimler’s price, but may also cap prospective gains if the stock climbs. Buyers in such transactions typically pass on the risks of the stock falling to the banks, which get lucrative fees in return. Li’s acquisition of the stake in the owner of Mercedes-Benz, which marks the biggest investment in a global automobile manufacturer by a Chinese company, boosts the prospects of his carmaker Zhejiang Geely Holding Group Co. The photographer-turned-tycoon wants Geely and Daimler to cooperate in the areas of battery-powered cars, online services, trip-sharing, and digital technologies.”
Bloomberg's report continues: “The Chinese company already owns Volvo Cars AB, whose refreshed line-up of vehicles have made it a popular alternative to the German luxury stalwarts. And in December, Li became the biggest shareholder in Sweden’s Volvo AB, the world’s second-largest truckmaker.”
AutoTrader CEO, George Mienie comments “South Africans are loyal and traditional car buyers, favouring the German brands. We have seen this for many years – it’s reflected in AutoTrader search statistics – the most searched-for vehicle in 2017 was the BMW 3 Series, followed by the Mercedes-Benz C-Class and the Volkswagen Golf.”
“However, given international trends – and the fact that Daimler, the world’s most prestigious vehicle manufacturer, now has Li Shufu, chairman of Chinese automaker Geely, as its largest shareholder – we could see a shift in buying preferences, with South Africans aspiring to own Chinese vehicles” Mienie comments. “Although I don’t think that this will happen anytime soon, this scenario is not as far-fetched as some industry commentators may think.”
Feb 05, 2025 0
Feb 04, 2025 0