Geely Holding said it had reached agreement to acquire 8.2 pc of Volvo Trucks, strengthening the Chinese automotive group’s international operations and raising the possibility that the two separate Swedish companies bearing the Volvo name could be united once more.
Geely said its stake in AB Volvo, the trucking group, will make it the largest holder of AB Volvo’s share capital. But the stake will carry 15.6 pc of the voting rights, making it the second-biggest owner in terms of votes after Swedish investment firm Industrivarden, which owns 22.8 pc of the votes.
Geely is buying its shareholding from fund managers Cevian Capital. Terms weren’t disclosed but press reports put the price of the transaction at more than 3 billion dlrs.
Until 1999, Volvo was one company making passenger cars as well as trucks. In 1999, the two divisions split and Ford Motor acquired Volvo Cars. The US automakers sold Volvo Cars to Geely in 2010.
Geely said there are no plans to reunite the two Volvos, but the Chinese automotive group said its new stake in AB Volvo will form part of a growing automotive manufacturing and investment portfolio.
Geely’s holdings also include the Geely Auto Group, a stake in Malaysian carmaker Proton, Lotus Advance Technologies and the London Electric Vehicle Company.
Late last year, Geely also acquired Terrafugia, a US start-up that wants to develop flying cars.