KUWAIT: Kuwait Investment Authority, the country’s sovereign wealth fund, has sold shares worth about €1.4 billion ($1.5 billion) in Mercedes-Benz Group AG — roughly a quarter of its stake — after the carmaker’s stock almost quadrupled over the last three years. KIA will own around 53 million shares after the share placement of about 20 million shares, which is part of an effort to diversify its portfolio, according to a statement.

The stake sale, which represented about 1.9 percent of Mercedes’ share capital, was priced at €69.27, according to the terms seen by Bloomberg. The price was a 3.6 percent discount to the stock’s closing price Tuesday. The sale will reduce its stake to less than 5 percent.

Mercedes shares dropped 2.4 percent on Wednesday, after having surged about 50 percent from July through the start of March and having more than quadrupled since their March 2020 pandemic low. The KIA had informed the company of its decision and it plans to remain a key shareholder in the automaker, the German company said in a separate statement.

Chief Executive Officer Ola Kallenius has focused the automaker on more profitable segments and pared back its offerings of entry-level models, leading to a 43 percent surge in the average price of a Mercedes since 2019. He also split the luxury-car company from its commercial vehicle operation, spinning off Daimler Truck Holding AG in late 2021.

While the luxury strategy has boosted earnings, signs of strain have emerged, with Mercedes having cut the price of flagship electric models in China, while the European and the US economies are weakening. Kuwait owned 6.84 percent of Mercedes prior to the sale, making it the third-biggest holder, according to data compiled by Bloomberg. The KIA — the world’s oldest and one of the largest wealth funds — has been a Mercedes shareholder for almost 50 years. – Agencies