Geely is attempting to become largest shareholder in AB Volvo with this $3.3 billion deal
Volvo owner Zhejiang Geely Holding Group is read to acquire 8.2% stake in the truck manufacturer AB Volvo from Cevian Capital. The Chinese automobile group is ready to purchase the stake at an amount of $3.3 billion that will make it largest shareholder in the truck maker company. Also, it will give Geely second biggest voting right at 15.6%.
The Chinese company currently owns Volvo Car Group that was separated from AB Volvo back in 1999. However, Geely clears that it doesn’t want to merge the two companies again. Meanwhile, with this acquisition Geely will have access to Dongfeng Commercial vehicles, the state owned truck manufacturer in China. AB Volvo currently has 45% stake in Dongfeng.
While announcing the acquisition deal, Geely has said that it will work to expand the brand’s reach across the world. Also, it wants to contribute significantly to develop electric powertrain technology, autonomous driving tech and connectivity solutions. Volvo is already working on such technologies and with Geely on board of AB Volvo, the company is expected to see things getting a boost.
Also, with this investment, A Volvo is expected to strengthen its grip in the Chinese market. So far, with Geely Holding in its list of investors, AB Holding aims to become a major player in the premium commercial vehicle market.
Speaking about Geely, the Chinese company is aiming to become a major player in the world of automobiles. Apart from owning Volvo since 2010, the Geely Holding also has several other automotive companies under its arm that include the Lynk & Co, Yuan Cheng Auto and Terrafugia. Among these companies Terrafugia is a flying car startup that is working on futuristic mobility solutions.
Geely also purchased the British car manufacturer Lotus in 2017. On 24th may this year, Geely bought 51% stake in the company that gave the Chinese auto group controlling power in the British brand.