Geely becomes top stakeholder in Volvo Group

Ann Santiago
December 29, 2017

Volvo Car Group was split from AB Volvo nearly 20 years ago and Geely said it was not its current intention to try to reunite the two businesses.

Chinese firm Geely, the maker of London's iconic black cabs and the owner of Volvo cars, has snapped up a stake in the Volvo truck business.

"We will treat the new owners in the same way that we treat our other shareholders", a spokesman for AB Volvo said.

Geely Holding also has stakes in the company that makes London's black cabs, sports carmaker Lotus, the London Electric Vehicle Company, and the Boston-based flying auto company Terrafugia Inc.

The investment in AB Volvo is the latest step by the Chinese automotive group, founded and controlled by billionaire Li Shufu, to expand its footprint around the world.

Geely Automobile Holdings Ltd., the group's Hong Kong-listed stock, gained as much as 4.7% on Thursday to HK$27, the highest intraday level since 6 December.

Geely plans to buy Cevian's 88.5 million Class A Volvo shares and 78.8 million Class B shares, the two companies said on Wednesday.

Nomura International Plc and Barclays Capital Securities Limited have agreed to acquire Cevian Capital's shares, and will sell them to Zhejiang Geely Holding Group when the necessary regulatory approvals have been obtained, the companies said.

Christer Gardell, co-founder of Cevian, said that the transaction gives AB Volvo a "large and committed shareholder", and with one with expertise in strategically important areas, alluding to the Chinese market and its expertise in areas including electric cars.

Volvo has also begun to reap the benefits from years of restructuring measures, including major cost-cutting programs, selling off non-core businesses, and management changes.

Geely has also formed an electric-vehicle joint venture with Volvo Cars, pledging an investment of 5 billion yuan (US$758 million) to support Polestar-branded high-performance electric cars.

Other reports by

Discuss This Article