BMW’s Quandts quash Merc merger

Any hopes of a titanic merger between German luxury brands Daimler AG and BMW have been suppressed thanks to intervention from the Bavarian marque’s leading family, the Quantds.

By Gareth Dean

The proposed merger that was artfully described in German publication as “two porcupines trying to exchange tender caresses” would have seen the two companies taking a 7 percent stake in one another.

According to the report, the concept of an alliance had been the subject of discussions between Daimler CEO Dieter Zetsche and BMW boss Norbert Reithofer for more than a year. Zetsche and Reithofer had envisaged the corporate alliance as a move that “would dominate the premium car segment in the worldwide automotive industry”. Despite the somewhat totalitarian rhetoric surrounding the potential alliance, both companies had approached the office of German Chancellor Angela Merkel to enquire if the government would pose anti-monopoly objections to a merger.

The main objection to the alliance came from BMW’s ruling family, the Quandts, including matriarch Johanna Quandt, her son Stefan and his sister Susanne Klatten. The Quandts feared that Daimler would use the alliance as a platform from which it could attempt to control the new business entity, mush like it did with Chrysler after the initial “merger of equals”.

As a result, co-operation between the two companies has now been pared down to a joint parts-procurement deal for such parts as batteries and headlamps which could save millions for both of them. BMW and Daimler are also part of a global consortium, along with GM, centred on developing hybrid powertrains and components.

The other area in which BMW and Daimler are looking to combine their efforts is in the joint development and sharing future small-car platforms and four-cylinder engine development. This apparently is happening in the face of opposition from Peugeot, who has blocked Daimler from joining the existing PSA-BMW engine alliance which has produced engines for BMW’s Mini range.

Needless to say, the likes of VW/Audi must be breathing a collective sigh of relief.

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