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Geely Holding invests over $3 billion in AB Volvo

30 December 2017

China’s Geely Holding has reached agreement with Cevian Capital to acquire its entire 8.2% share capital holding and 15.6% voting rights in AB Volvo—the leading manufacturer of trucks, buses, construction equipment, diesel engines, and marine and industrial engines. With the acquisition, Geely will become the largest holder of share capital in AB Volvo.

Under the terms of the agreement, Geely Holding has committed to acquire Cevian’s 88.47 million A-shares and 78.77 million B shares in AB Volvo. The transaction value was not disclosed, but based on market prices it was worth about $3.3 billion. According to Swedish press reports, Geely paid 3.25 billion euro ($3.86 billion) for the stake.

The strategic investment follows Geely Holding’s 2010 acquisition of Volvo Cars—which was split from AB Volvo in 1999—from Ford Motor Company. AB Volvo 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 owns 45% of Dongfeng Commercial Vehicles—one of China’s largest truckmakers—and has a significant construction equipment business in China.

Source: Geely Holding | Reuters