(Yicai Global) Dec.14 – China's automotive giant Zhejiang Geely Holding Group Co. [HKG:0175] is proceeding with an acquisition of an unspecified amount of stake in Mercedes-Benz, China Central Television (CCTV) reported, citing insiders.

Geely told Mercedes's parent company Daimler AG [ETR:DAI] that it intends to buy 3 percent to 5 percent of its shares for nearly EUR4 billion (USD4.7 billion), some media reports speculated. If the deal goes ahead, Geely will become Daimler's third largest shareholder.

Daimler reportedly rejected a bid by Geely to buy up to 5 percent share in the company on the grounds that it would dilute holdings of its stakeholders. However, it told Geely can buy shares in the open market, media reports quoted unnamed sources as saying.

Geely has made a number of acquisitions initiatives in recent months. It reached a final agreement with the US-based Chinese flying car firm, Terrafugia, on Nov. 13 to acquire the latter's total business and assets. The deal has been approved by all relevant regulatory agencies, including the Commission on Foreign Investment in the US (CFIUS). Terrafugia specializes in the design and manufacture of flying cars and has several scientific achievements in the field.

Per the current plan, the world's first flying car will be made in the US in 2019. The world's first vertical takeoff and landing flying car is projected to go into mass production in 2025. Terrafugia has also set up a research and development center in Hangzhou, capital of East China's Zhejiang province, and plans to start mass production of flying cars in China in the future.

China's Geely has come under the spotlight in the global automotive industry after it bought the entire equity in Ford Motor's Volvo Car Corporation in August 2010.