Geely Holding becomes largest AB Volvo shareholder
The Chinese owner of Volvo Cars is to buy 8.2% of AB Volvo, manufacturer of Volvo trucks.
Geely Holding will buy the stake in the manufacturer from investor Cevian Capital, which will make the Chinese firm AB Volvo’s largest individual shareholder with 15.6% voting rights when the deal is completed.
While the parties declined to reveal the cost of the transaction, Swedish paper Dagens Nyheter cited estimated its value at €3.25bn (£2.9bn), claiming to have a source with knowledge of the deal.
The Chinese group said it has no intentions of merging Volvo Cars with its commercial vehicle counterpart, but that its expertise in the Chinese market will enable growth in AB Volvo.
In a statement last week, Geely Holding’s chairman Li Shufu said: “We are delighted to have reached agreement with Cevian to acquire its holding in AB Volvo, making us the largest holder of share capital in a company that leads the world in many aspects of commercial vehicle development, manufacturing and sales.
“Given our experience with Volvo Car Group, we recognise and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo.
“We will support the Board of Directors and the management of AB Volvo in their continued execution of the current strategy.”
Geely Holding CFO and executive vice president Daniel Donghui Li added that the group would support and “strengthen the Volvo brand” with its own research and development in autonomous vehicles, electrification and vehicle connectivity.
Based in Gothenburg, AB Volvo owns Dongfeng Commercials, one of China’s largest commercial vehicle manufacturers.
Both Cevian and Geely Holding are bound to the deal, which is currently undergoing regulatory approval.
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