By Scott Kanowsky
Investing.com -- Shares in Mercedes Benz Group AG (ETR:MBGn) dropped by as much as 2.5% on Wednesday after its third-biggest stakeholder reportedly sold 20 million shares at a discount.
According to media reports, the Kuwait Investment Authority, the sovereign wealth fund of the Gulf state, is placing the shares at a price of €69.27 apiece (€1=$1.0855) - more than 3% below their latest close. KIA will now own less than 5% of Mercedes-Benz, or about 53 million shares, down from its prior level of 6.84%.
The sale, worth about €1.4 billion in the German carmaker, represents just under 2% of the company's total share capital.
In an emailed statement quoted by Reuters, Mercedes-Benz said that the KIA is "committed to continuing the successful partnership with Mercedes-Benz and will remain a key shareholder."
KIA's move comes after Stuttgart-based Mercedes-Benz posted a 28% jump in earnings before interest and taxes last year, as a focus on higher-priced luxury models helped offset weak demand in Europe.
But the business warned that sentiment in the first quarter of 2023 has been hit by the spread of COVID-19 cases in China since the end of strict pandemic-era regulations.
Shares in the business climbed after the release of its yearly results in February, and have gained more than 12% over the past one-year period.