Geely Holding accelerates drive into commercial vehicles by becoming largest shareholder in truckmaker AB Volvo; $3.3B investment
Zhejiang Geely Holding Group (Geely Holding), China’s leading privately-owned automotive group, will acquire Cevian Capital’s entire 8.2% share capital holding and 15.6% voting rights in AB Volvo, the leading Swedish manufacturer of trucks, buses, construction equipment, diesel engines, and marine and industrial engines. Reuters calculated the value of the investment at $3.26 billion.
The strategic investment follows Geely Holding’s 2010 acquisition of Volvo Car Group from Ford Motor Company, and will form part of an automotive manufacturing and investment portfolio that also includes a controlling stake in Geely Auto Group as well as strategic investments in PROTON Holdings Bhd, Lotus Advance Technologies and ownership of the London Electric Vehicle Company (LEVC) and the flying car company Terrafugia Inc.
AB Volvo itself owns 45% of Dongfeng Commercial Vehicles, one of China’s largest truckmakers.
Under the terms of an agreement signed by Daniel Donghui Li, Chief Financial Officer and Executive Vice President of Geely Holding and Cevian in the presence of Christer Gardell, co-founder of Cevian, Geely Holding has committed to acquire Cevian’s 88.47 million A-shares and 78.77 million B shares in AB Volvo. On completion and following necessary regulatory approvals, Geely Holding will become the largest holder of AB Volvo’s share capital.
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 Chairman Li Shufu
Geely said there are no plans to recombine the two Volvo companies at this time.