Auto giant sees huge potential in iconic UK brand, after $17.5m deal
China's privately owned automaker Zhejiang Geely Holding Group Co said on Friday that it has finalized the acquisition for 11.04 million pounds ($17.46 million) of Manganese Bronze Holdings, the maker of the iconic London black cabs.
The acquisition includes a plant, equipment and property, intellectual property rights and trademark s, said Geely.
The deal also includes Manganese Bronze's 48 percent stake in a Shanghai joint venture set up with Geely in 2009 and Manganese Bronze's stock of unsold vehicles.
Geely, which attracted worldwide attention after its acquisition of Swedish car brand Volvo in 2010, was already a shareholder in Manganese Bronze after buying a 19.97 percent stake in separate deals in 2006 and 2010.
Geely's priority will be to re-establish the production, sales and servicing of vehicles on broadly the same basis as before Manganese Bronze went into administration last Octo ber. This will include the continued asse mbly of the TX4 model at Coventry plant in the UK, the Chinese company said in a statement.
Geely said that it is looking at the future needs of the London taxi market, with a view to developing new models to follow the TX4, improving energy efficiency and the environment al footprint of the traditional London cabs, as well as examining the potential for entering the private hire market.
"We are delighted to restore the fortunes of this totemic marque which is known, recognized and admired all around the world. Despite its recent difficulties, we have long believed that the company and the black cab have huge potential," said Li Shufu, Geely's chairman.
"We also believe that the brand, technology and design know-how of Manganese Bronze will benefit Geely and our own model range," Li said.
Zhong Shi, an auto analyst based in Beijing , said that the unprofitable Manganese Bronze was "worth buying", and that the relatively small deal "won't bring a huge risk to Geely in the future".
Meanwhile, in addition to the Chinese automakers' frequent acquisitions of ailing foreign players, global vehicle makers are also finding opportunities in the world's largest automobile market through investments in Chinese OEMs.
On Friday, German auto conglomerate Daimler AG signed a binding agreement with Beijing Automotive Group to invest in BAIC Motor, the passenger-car unit of the BAIC Group through the issuance of new shares corresponding to a 12 percent stake of the latter.
The move comes ahead of a planned initial public offering by BAIC Motor in the near future.
Daimler also becomes the first foreign manufacturer to take a stake in a Chinese automaker.
However, the deal is still subject to regulatory approval and is only expected to close by the end of this year or early next year.
The agreement includes a clause stating that Daimler will get two seats on BAIC Motor's board of directors. The two companies also agreed that BAIC will increase its stake in their production joint venture Beijing Benz Automotive Co by 1 percent to 51 percent and will thus be able to consolidate the joint venture within BAIC ahead of the IPO.
At the same time, Daimler will increase its stake in the newly integrated sales joint venture Beijing Mercedes-Benz Sales Service Co by 1 percent to 51 percent.
"Following our technical coo peration with BAIC Motor and the setup of our integrated sales company, we are now taking the next step in deepening our relationship even further," said Dieter Zetsche, chairman of the management board of Daimler and head of Mercedes-Benz Cars.
"Our decision demonstrates the full support of our partner's intention to publicly list its shares in the future," Zetsche said.
Xu Heyi, chairman of BAIC said: "Daimler's investment in BAIC's stake will go a long way in accelerating the development of BAIC's self-owned brand in terms of capital, technology, management, and brand."
Mercedes-Benz Cars has already brought its complete product portfolio to the Chinese market. It sold around 210,000 vehicles in 2012, and plans to add 50 new dealers to expand its current network of 220 this year.