Geely in talks with Volvo to join forces

10 February 2020 - 18:08 By Reuters
Li Shufu, chairman of Zhejiang Geely Holding Group, which is in discussions with Sweden's Volvo about combining the two businesses into a global carmaker.
Li Shufu, chairman of Zhejiang Geely Holding Group, which is in discussions with Sweden's Volvo about combining the two businesses into a global carmaker.
Image: Erik Abel/Bloomberg via Getty Images

China's Geely Automobile said on Monday it was in early discussions with Sweden's Volvo Car AB about combining the two businesses into a global car maker with listings in Hong Kong and Stockholm.

Zhejiang Geely Holding Group, Geely Automobile's parent group, acquired Volvo from Ford Motor Co in 2010.

The combined company would have "the scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry", it said.

The combination of two businesses would bring together brands including Volvo, Geely, Lynk & Co and Polestar. Geely's new energy brand Geometry will also be included, a company spokesman confirmed.

There had been previous discussions about listing Volvo as a separate company in Stockholm, but these were put on hold in 2018.

The parent group, led by billionaire Li Shufu - which has a number of other investments including a 9.7% stake in Daimler acquired in 2018, a 49.9% stake in Proton in 2017 and majority stake in British sport car brand Lotus - is trying to consolidate assets as the industry adjusts to tougher emissions rules and the rise in demand for electric cars.

Last year, Volkswagen and Ford said they will spend billions of dollars to jointly develop electric and self-driving vehicles, while FCA and PSA agreed a $50bn (roughly R751.52bn) merger to create the world's fourth-biggest automaker.

In October, Volvo Cars said it would merge its engine development and manufacturing assets with those of parent Geely, creating a division to supply Lotus, LEVC, Lynk and Proton and also potential rivals with next-generation combustion and hybrid engines.

Geely Automobile sold 1.36-million cars in 2019 and aims to sell 1.4-million cars this year. Volvo sold just over 700,000 cars last year.


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