Daimler takeover - round two

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Stories are beginning to surface again about the likelihood that Mercedes’ parent company Daimler will lose its independence. Earlier this month, other takeovers in Germany focused a spotlight on Daimler’s situation. Currently the German carmaker has lost 45 percent of its value over the last year, but it still has €9 billion ($13.2 billion) in liquidity – a combination that makes it a perfect storm for unwelcome new owners. A spokeswoman for Daimler said: “We do not see ourselves as a takeover candidate, but we cannot totally exclude the possibility. We have no indications that an investor is building a large stake.”

Daimler’s only large shareholder is the Emirate of Kuwait, with a stake of 7.6 percent as of the end of April. But multiple hedge funds own a total of about 20 percent of the company. A Swedish investment firm Cevian Capital also bought a stake in the company and has been part of the rumor of a potential new parent for Daimler.

Unlike its cross-country rival BMW, Daimler shares are completely traded on the open market. The Quandt Family has held a controlling interest in BMW since 1959, and so they can block any takeover attempts. But there still is hope that if a foreign company tries to take over Daimler that it will become a point of national interest. Then Daimler may get its own “Volkswagen Law”—A German rule that protected Volkswagen from voting rights for any investor going beyond 20 percent (Porsche has since struck it down.)

So could Daimler end up the in the same hedge-fund fate as its former subsidiary Chrysler? Time will tell, and we’ll tell you.


Source: Financial Times

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