Automotive News   |   Automotive News Europe   |   Autoweek   |   Automobilwoche

Automotive News China Newsletter
Register our free newsletter, sent each Monday and Thursday

     Automakers   Suppliers   Auto Show   Comment   Car Cutaway   Newsletters   Press Releases   Chinese Version   Register for Newsletter
  Contact Us:   Editorial   Advertising   Subscription Information   |   About Us   Media Kit
Home >> Automaker Email this story   Print this story
 
Geely to invest in heavy-truck maker AB Volvo
Bloomberg | 2018/1/5

About a decade after Chinese billionaire Li Shufu bought Volvo Car Corp. from Ford Motor Co. and revived the brand, he¡¯s turning his attention to the separately owned Swedish company¡¯s heavy trucks in a bid to expand outside China.
 
Zhejiang Geely Holding Group Co. says it plans to buy a stake in AB Volvo from activist investor Cevian Capital AB, making it the truckmaker¡¯s largest shareholder. 

Sources told Bloomberg that the deal is valued at 3.25 billion euros (25 billion yuan), verifying a report by Swedish newspaper Dagens Nyheter. 

The stake, representing 8.2 percent of Volvo¡¯s capital and 16 percent of the votes, would mark Geely¡¯s first foray into the heavy-truck market. In addition to its namesake heavy-vehicle brand, AB Volvo's marques include Mack, Renault Trucks and UD. 

"Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo," Li, Geely¡¯s chairman, said in a statement. 

¡®No plans to merge¡¯ 
There are "no plans to merge" the two Volvos, a Geely spokesman told Reuters.

Last year, Geely bought a 49.9 percent stake in Malaysia¡¯s Proton Holdings as well as 51 percent of Lotus Cars. 

¡°Geely is becoming a full-range transportation company and seems to be defining itself as a company that moves people and things,¡± said Bill Russo, managing director of Gao Feng Advisory Co. ¡°Any device that does this is on their radar.¡±

Geely plans to buy Cevian¡¯s 88.5 million Class A Volvo shares and 78.8 million Class B shares, the two companies said. Last autumn, the Chinese company sought to buy out Cevian¡¯s stake.

Board seat 
Joakim Kenndal, a spokesman at Gothenburg-based Volvo, said the stake sale ¡°came as a surprise.¡± Geely spokesmen declined to comment on the transaction beyond the company statement. 

Geely plans to seek board representation, the source said. Cevian has one seat on the Volvo board. Hakan Samuelsson, CEO of Geely¡¯s Volvo Car Group, also sits on the truckmaker¡¯s board.

Nomura and Barclays agreed to buy Cevian¡¯s stake in Volvo and sell it to Geely once the purchase has regulatory approval, the Chinese carmaker said.
 
Cevian has long wanted AB Volvo, Europe¡¯s second-biggest maker of commercial vehicles, to divest its construction equipment business. While that hasn¡¯t happened, Volvo has disposed of its information technology business and cut jobs.

Revival
If the successful revival of Volvo Car Group under Li is any precedent to go by, the transaction may benefit Volvo trucks as well. 

Li started out making refrigerator parts and later turned a bankrupt state-owned manufacturer into China¡¯s biggest privately owned carmaker. He cemented his reputation as a savvy deal-maker after reviving Volvo Cars after the purchase from Ford in 2010. 

He gave Volvo¡¯s engineering team the resources to invest in new models. At the same time, he lowered the Swedish manufacturer¡¯s high costs by jointly developing vehicle underpinnings with Geely, while building an assembly plant in China for exports. 

Swedish Enterprise Minister Mikael Damberg said he welcomed the new investor in Volvo, the country¡¯s largest company by revenue. 

¡°The new owner Geely has proven to be a serious investor linked to the development of Volvo Cars, made major investments in Sweden, grown the number of employees and has so far been a success story,¡± he said to news agency TT.
 
The Chinese company said it plans to use the new tie-up with AB Volvo to enhance the truckmaker¡¯s electrification, autonomous driving and connectivity.
 
While Geely will be the biggest shareholder, it will rank second to investment firm Industrivarden AB in voting rights because Industrivarden owns Class A shares that have greater voting power than Class B stock. 

Reuters contributed to this report.

Related Stories
  • Daimler may buy tiny stake in Volvo, report says
  •     --Published:2018/24/4
     
  • Daimler investor Li warns automakers must talk or face oblivion
  •     --Published:2018/20/4
     
  • Geely's March sales surge on spike in crossovers
  •     --Published:2018/17/4
     
  • Daimler to discuss cooperation in China with Geely's Li Shufu
  •     --Published:2018/6/4
     
  • Volvo deliveries jump 18% behind XC60, S90
  •     --Published:2018/6/4
     
  • Volvo plant to make Lynk & CO cars for Europe
  •     --Published:2018/30/3
     
  • Geely calls for caution in self-driving tech after U.S. fatality
  •     --Published:2018/30/3
     
  • Geely sees overseas deals fueling growth
  •     --Published:2018/23/3
     
  • Geely Auto's net profit more than doubles in 2017 on robust sales
  •     --Published:2018/23/3
     
  • Geely sales remain robust despite holiday
  •     --Published:2018/13/3
     
  • Geely taps Autoliv, Zenuity to develop system for Level 3 autonomy
  •     --Published:2018/13/3
     
  • Daimler deal driven by brand cachet vs. common ground, Geely's Li says
  •     --Published:2018/13/3
     
  • Daimler: Future deals with Geely hinge on partners BAIC, BYD
  •     --Published:2018/9/3
     
  • Volvo deliveries continue rise on demand for locally built models
  •     --Published:2018/9/3
     
     

    Our Newsletter Editions
    Automotive News China produces two email newsletters each week. You can sort your news by the articles highlighted in each of our newsletters here.

    Select your newsletter     

     
     

    Automotive News China
    Room 1303, Building 2, Lane 99, South Hongcao Road,
    Shanghai 200233
    Telephone: 86-139-1851-5816
    Fax: 86-21-6495-0895
     
    Home | Help Center | About Us | RSS
    Entire contents © Crain Communications, Inc.
    Use of editorial content without permission is strictly prohibited. All Rights Reserved.
    »¦ICP±¸06057291ºÅ