Sun | Nov 18, 2018

China’s Geely buying stake in Swedish truck maker Volvo

Published:Friday | December 29, 2017 | 12:00 AM

The Chinese owner of Sweden's Volvo Cars is buying a stake in truck manufacturer AB Volvo, expanding a portfolio of vehicle brands that includes shares in Malaysia's Proton and Britain's Lotus.

Geely Holding Group said Wednesday the acquisition of shares from Cevian Capital, a fund manager, would give it 8.2 per cent of Volvo's share capital and 15.6 per cent of voting rights. Financial terms weren't disclosed, though analysts estimated the value of the deal at around 27 billion kronor (US$3.3 billion).

The Swedish company, which also makes buses, construction equipment and diesel engines, was the parent of Volvo Cars until 1999, when it was sold to Ford Motor Co. Geely bought Volvo Cars in 2010.

"We recognise and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo," said Geely Chairman Li Shufu in a statement.

The transaction will make Geely the biggest single shareholder in Volvo and the second-biggest holder of voting rights. Christer Gardell, the co-founder of Cevian Capital, said Geely would be able to provide Volvo with valuable access to the Chinese market and know-how in the field of electric and self-driving vehicles.

Li said Geely would support Volvo management's current strategy.

Geely owns Geely Auto, one of China's biggest independent automakers. It agreed in May to buy 49.9 per cent of Proton and 51 per cent of Lotus, which was owned by the Malaysian automaker.

Geely also launched a new brand, Lynk & Company, in 2016.

- AP