Mercedes-Berg, Germany’s largest carmaker, is buying $6.7 billion in the electric automaker Tesla stock, its first public acquisition since the automaker was founded in California in 1984.
The move, which is part of a $8.8 billion deal announced Wednesday, will add to a $2.6 billion cash buyback Tesla has put into the company.
It also expands its presence in emerging markets like China, where the company has struggled to compete with bigger names.
Tesla stock was down 4% in after-hours trading on Wednesday.
The company’s stock was last trading in the high-single digits on Wednesday, before the deal was announced.
The deal will give Mercedes-Beggs an operating arm in Tesla, a market leader in electric cars and a key partner in the global effort to reduce carbon emissions.
In return, Mercedes-Brands will have an exclusive seat in the board of Tesla’s board.
Mercedes-Becker is known for its electric-car offerings and has invested heavily in battery research.
The purchase comes as Tesla faces mounting pressure to release details about its plans for electric vehicles, which are being developed by automakers, including Volkswagen AG, Daimler AG, and General Motors Co. The technology is gaining momentum, but Tesla has resisted taking steps that would put it in competition with electric-vehicle makers.
The announcement of the $6-billion deal comes as the company seeks to reduce its carbon emissions by about 40% compared with 2020 levels.
Merkel said last week that the deal would “ensure that Tesla will continue to be a leader in the development and deployment of electric vehicles.”
The new ownership group will also oversee Mercedes-BMW, which owns Mercedes-Benzes, Mercedes S-Class, and the Mercedes-Luxury brand.
Merck will be the company’s fourth investor in Tesla since its founding in the early 2000s.
Mercks board of directors will be headed by Jens-Erik Wohlfahrt, who is currently chairman of the board at Volkswagen AG.