Daimler Says Abu Dhabi Investment Will Provide Cash Advantage
Daimler AG, the second-largest maker of luxury cars, said the sale of a 9.1 percent stake to an Abu Dhabi investment fund gives it an advantage over rivals that have yet to seek additional cash as automotive markets shrink.
Daimler raised 1.95 billion euros ($2.66 billion) selling new shares to Aabar Investments PJSC. The money will be used to finance fuel-saving technology such as development of battery- powered vehicles, Chief Executive Officer Dieter Zetsche said today at a Stuttgart, Germany, news conference.
The investment buttresses Daimler’s resources as the worst auto-industry crisis in decades forces the maker of Mercedes- Benz cars and trucks to cut hours for 54,000 German assembly- line workers and close two plants in North America. Carmakers need capital as deliveries fall, and Daimler has a “first-mover advantage” in winning Aabar as a shareholder, Zetsche said.
“We are not surprised by the capital increase and indeed expect similar moves” by auto manufacturers across Europe, Adam Jonas, a London-based Morgan Stanley & Co. analyst with an “overweight” recommendation on Daimler, said today in a research report.
This article was originally posted on Bloomberg