Geely, the Chinese parent of Volvo Cars, is set to buy a significant stake in Daimler, the company behind Mercedes-Benz and Smart.

According to The Global Times, the state-run China Central Television (CCTV) network is reporting Zhejiang Geely is about to buy three to five per cent of Daimler for 4.0 billion euros ($6.2 billion).

Above: Mercedes-Benz CLS.

If this purchase does take place, Geely will become the second or third largest single investor in Daimler, as Kuwait holds 6.8 per cent, and the Renault Nissan Mitsubishi Alliance has 3.1 per cent.

Private investors own a total of 19.4 per cent of Daimler, with the remainder (70.7 per cent) held by institutional investors.

In a report by Reuters in November, Daimler rejected Geely's request to purchase a five per cent stake at a reduced rate. The German firm told the Chinese automaker it was welcome to purchase shares on the open market.

Above: Geely Emgrand GT.

Currently, Geely sells vehicles under its own brand, and completely owns Volvo Cars and the London Taxi Company. In May, Geely purchased a 49.9 per cent of Proton and 51 per cent of Lotus from Malaysian conglomerate DRB-Hicom.

It has since spun off Polestar from Volvo, and has taken over of flying car firm Terrafugia. Geely is also in the process of launching the Lynk & Co marque with its own range of Volvo-derived products.