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Daimler seeks stake in China car maker

German auto maker Daimler is planning to buy a 10 to 20 percent stake in the passenger car unit of its Chinese partner BAIC Group and could sign the deal Friday, a state-backed newspaper said.

The National Business Daily said on Thursday the deal for a portion of BAIC Motor will enhance Daimler’s presence in China, the world’s largest auto market and the third largest for Daimler unit Mercedes-Benz after Germany and the US.

BAIC could not be reached for comment on Thursday. Daimler declined to comment on Wednesday, calling recent media reports “speculation”.

Earlier this month, Daimler chief Dieter Zetsche said the German company could take a stake in BAIC Motor ahead of its flotation.

BAIC Motor is planning a listing in Hong Kong later this year and is seeking to raise 10 billion yuan ($1.6 billion), BAIC Group chairman Xu Heyi has said, according to Chinese state media reports.

The National Business Daily said the introduction of Daimler as a strategic shareholder would boost the appeal of the BAIC Motor share offer and help restructure the company ahead of the listing.

BAIC Motor will also raise its stake in Beijing Benz, its joint venture with Daimler, from 50 percent to 51 percent, the newspaper added.

Daimler, which produces Mercedes-Benz cars as well as trucks, plans to sell 300,000 cars in China in 2015, about two-thirds of which will be from local production, the company said in December.

Chinese state media said earlier this month that the country’s sovereign wealth fund was considering buying a four to 10 percent stake in Daimler but a source with knowledge of the matter called the reports false.