A rumoured cross-share tie-up between BMW and Daimler is allegedly being blocked by the Munich company's majority owners, the Quandt family.

BMW's largest single shareholder is the legendary Quandt family which holds 46% of the Bavarian company. It could be argued that this majority stake makes BMW a family business rather than a public company. Nonetheless reports say this is how the powerful Quandts would like to keep things.

Recently it has been said that BMW AG and traditional arch rival Daimler AG (owners of Mercedes-Benz) would be buying stakes worth 7% in each other's businesses. Germany's Der Spiegel newspaper was the source of the initial report but now they are saying the Quandt family will oppose such a deal. The report says the BMW family is worried that Daimler might end up wanting to take over BMW in the same way it took over Chrysler in the late 1990s.

Currently the two companies have an agreement to purchase in bulk parts that are common for both of them. BMW has a similar agreement with PSA Group (makers of Peugeot and Citroen vehicles) where the Germans develop 1.6-litre petrol engines and the French use their massive purchasing power to bring down production costs for both entities. The deal is for 1 million engines where PSA takes 800,000 and BMW keeps 200,000, mostly for its MINI brand. Fiat is also in talks with BMW but nothing concrete has been set.

Last week WCF asked the CEO of Daimler South Africa, Dr Hansgeorg Niefer, if the proposed cross-share deal was real or not.

"No," said Niefer. "We only have an agreement to share purchasing costs for parts that don't differentiate between a Mercedes-Benz and a BMW."

So there is no merger then. Yet. But still, the lure of buying into each other is ever increasing given the bad state of affairs for the automotive sector. Costs would be significantly lower.


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