GEELY BECOMES LARGEST SHAREHOLDER OF AB VOLVO
Geely accelerates its drive into commercial vehicle production by becoming largest shareholder in truck and bus manufacturer AB Volvo by acquiring the Ceviat Capital share in this company, which is valued at $3.3B.
Zhejiang Geely Holding Group (Geely Holding) will acquire Cevian Capital’s entire 8.2% share capital holding and 15.6% voting rights. AB Volvo is considered to be one of the world’s leading manufacturers 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.
Geely said there are no plans to recombine the two Volvo companies at this time.