Geely Buys $3.3B Stake In Volvo’s Truck Line
Zhejiang Geely, the Chinese automaker best known in the West for its ownership of Volvo and its recent acquisition of Lotus, has just purchased an 8.2-percent stake in AB Volvo for an estimated $3.3 billion U.S. dollars. Though it appears a small stake, the 8.2-percent makes Geely the largest shareholder of AB Volvo and the second largest by voting rights, just behind the investment firm Industrivarden. This puts Geely in a power position over both Volvo cars and AB Volvo’s commercial truck and bus business. A Geely spokesperson said the company has no intention of reuniting the two Volvo divisions, which had separated in 1999. Geely purchased the stage from the investment firm Cevian Capital.
“Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo,” Geely Holding Chairman Li Shufu told Reuters in a statement in late December 2017.
Geely’s purchase also means it now controls AB Volvo’s 45-percent stake in Dongfeng Commercial Vehicles, a large player in China’s commercial truck market. Interestingly, Geely is also working to buy a three to five percent stake in Daimler, the parent company of Mercedes-Benz and Smart, worth an estimated $4,7 billion. Not only does Mercedes have its massive consumer-based vehicles, but also its commercial arm that builds a wide range of light- to heavy-duty vehicles. That would put Geely in an authoritative position in the commercial trucking industry.