Chinese EV Trade Wars Hits Volvo Cars

Volvo Cars (VOLCAR B:STO) today announced the selling of its 30% stake in Lynk & Co to Zeekr, a transaction representing a consideration of RMB 5.4 billion (~ SEK 8 billion). The transaction will be paid in cash, with 70% of the amount paid at closing, and 30% plus interest paid one year after closing. The transaction is expected to close during the first quarter of 2025. Volvo Cars is currently trading near its all time low.

The transaction involves Volvo Cars (China) Investment Co., Ltd, an indirect subsidiary of Volvo Car AB, selling its share in Lynk & Co Automotive Technology Co., Ltd to Zhejiang Zeekr Intelligent Technology Co., Ltd, an indirect subsidiary of Zeekr Intelligent Technology Holding Limited.

Volvo Cars has been a minority shareholder of Lynk & Co since the company was set up in 2017. The divestment is in connection with a new phase of development for Lynk & Co going forward, which includes a new ownership structure for the company. Volvo Cars claimed it will continue to focus on operational collaborations with Lynk & Co in selected markets where there is a strategic benefit for both companies.

Geely Holding Group said it “welcomes the intention of its invested new energy brands, Zeekr and Lynk & Co, to seek greater synergies through a proposed combination, which would create a strong global entity. The proposed move aims to accelerate technology synergies between the two brands, streamline product portfolios, and boost talent development, ultimately leading to greater global sales volume.

“As part of the reorganization, Geely Holding will support its subsidiary Zeekr Intelligent Technology (Zeekr NYSE: ZK) intention to own a majority stake in Lynk & Co by acquiring shares held by Geely Holding and Volvo Cars. After the completion of the transactions, Zeekr will hold 51% shareholding in Lynk & Co, while the remaining 49% will continue to be held by a wholly own subsidiary of Geely Automobile Holdings (Geely Auto 0175.HK).

“At the same time, Geely Auto plans to increase its stake in Zeekr to approximately 62.8%, further supporting the close collaboration of Geely Auto, Lynk & Co and Zeekr brands, improving industrial synergies, hardware and software commonality, supply chain efficiency, after sales service, and accelerating the creation of a stronger global group,” Geely said in a release.

“This integration is a key measure for Geely Holding to implement its long-term strategic plans. The coordination and integration of our brands supports their sustainable operations and generates greater synergies that benefit sales, services, revenue, and product competitiveness allowing our companies to provide greater value and opportunities to both global consumers and shareholders,” said Eric Li (Li Shufu), Chairman of Geely Holding.

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