Volvo owner Geely may become the largest shareholder in Daimler with the company planning to buy an over 6.8 percent share in Mercedes-Benz' parent company, according to German media reports.

Previous reports from Chinese state media suggested that the Chinese giant would buy 3-5 percent of Daimler at a cost of £3.52 billion (over Rs 31,300 crore). The planned stake is as yet unspecified, but it's likely to exceed the 6.8 percent stake that the Kuwait Investment Authority holds in the company.

The acquisition would make Geely the biggest Daimler shareholder, also overtaking the Renault-Nissan-Mitsubishi Alliance, which owns 3.1 percent. Currently, 70.7 percent of Daimler is owned by institutional investors, while 19.4 percent is owned by private investors. Mercedes-Benz, however, has declined to comment on this.

Daimler previously rejected an offer by Geely to buy a stake at a reduced rate but told the Chinese company that it could buy shares in the open market, according to Reuters.

It's thought that Geely may be looking into the deal to further its electric car strategy.

The move is part of an aggressive expansion by Geely, which shot to prominence in Europe after acquiring Volvo in 2010 from Ford and then went on to buy The London Taxi Company in 2012. It established the Lynk&Co brand in 2016 and acquired a majority stake in Lotus and almost half of Proton parent company DRB-Hicom this year.

Recently, Geely also bought the US start-up Terrafugia that plans to launch a flying vehicle in 2019.