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Daily Trends Now


Geely buys stake in Volvo Trucks

Geely buys stake in Volvo Trucks

For an estimated $3.3 billion, Chinese vehicle maker Zhejiang Geely Holding Group is buying a roughly 8.2% stake in Sweden's AB Volvo, which builds commercial trucks, construction equipment, and marine vessel engines.

Geely, which already owns the Volvo Car Group, will be the largest shareholder in terms of capital and the second largest in terms of voting rights, behind Swedish investment firm Industrivarden.

Geely buying into the truck and industrial plant equipment could open up a massive new market in China to the company.

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

He said he is hoping that Geely's expertise in the domestic market and its skills in building electric and autonomous vehicles would help AB Volvo to expand. Geely and Cevian declined to disclose the exact value of the transaction.

Christer Gardell, co-founder of Cevian, said: "Today's announcement concludes over 11 years ownership in AB Volvo by Cevian".




Volvo's B shares traded 0.8 percent higher for the day at 0935 GMT, while Industrivarden's shares were flat.

However, Volvo shares have gained nearly 50 percent this year as it and rivals in the truck industry such as Germany's Daimler (DAIGn.DE) and Volkswagen (VOWG_p.DE) hit a sweet spot thanks to robust demand in major markets.

Lynk & Co, a joint venture between Volvo Cars and its parent group Geely, started selling its first model last month, joining the competition in the mainland's mainstream auto segment which is dominated by foreign brands including Volkswagen, General Motors, Ford and Toyota.

Shares of its Hong Kong-listed subsidiary Geely Automobile Holdings gained 0.6 per cent to HK$25.8 (US$3.30) on Wednesday, jumping 254 per cent from the close of past year.

In a sign of its ambitions, the Chinese company last month offered to take a stake of up to 5 percent in Daimler via a discounted share placement but was rebuffed, according to sources with knowledge of the talks.

Selling the stake in the company was Cevian Capital - an investor group.

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