Friday, March 29, 2024 | Ramadan 18, 1445 H
clear sky
weather
OMAN
25°C / 25°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Geely to deepen ties with Volvo, plans to list under one umbrella

1434978
1434978
minus
plus

BEIJING: Geely Automobile and its sister company Volvo Cars are planning to merge and list in Hong Kong and possibly Stockholm, giving Volvo access to public markets after it dropped a move to list its stock two years ago.


Monday’s move to merge the two units come as global automakers pursue alliances to respond better to the cost of switching to electric cars, tougher emission rules and autonomous driving.


Zhejiang Geely Holding Group, Geely Automobile’s parent, bought Volvo Cars from Ford Motor Co in 2010.


Together with electric premium brand Polestar and Geely’s new energy brand Geometry, the new company will have five brands, with products ranging from affordable sedans to luxury sports cars, marking the emergence of China’s first global carmaker, analysts said.


“Strategically, the deal feels like — after years of deal-making — a first move by Chairman Li Shufu to consolidate his sprawling automotive empire, and to pay off some of the debt that had built up,” analysts at Bernstein said in a note.


It remains unclear how much valuation would be added to Geely, a Hong Kong-listed, $16 billion company, by injecting Volvo assets. Geely’s sales started to surge from 2015 as its products began incorporating Volvo technology.


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.


Volvo and its parent group had been discussing an IPO to value the carmaker at between $16 billion and $30 billion before they dropped the listing plan in 2018, sources said.


Compared to Volvo’s IPO plan, this proposal could better align Geely and Volvo’s interests, Shi Ji, an analyst at Haitong International wrote in a note. Such a merger would help Volvo cross sell Geely cars worldwide as well as those made by sister brand Lynk & Co.


Volvo Cars and Geely will create a joint working group to prepare a proposal for their respective boards, the companies said in a statement on Monday.


— Reuters


SHARE ARTICLE
arrow up
home icon