Geely looks to combine automotive business with Volvo
11 February 2020
11 February 2020 Volvo and Geely are considering a merger to capitalise on shared experience in the automotive market. The Swedish carmaker is owned by Geely Holdings, and under the plans, the conglomerate’s automotive business would combine with Volvo to accelerate financial and technological synergies between the two companies. The combined business would have access to the global capital market through Hong Kong and with the intention to subsequently list in Stockholm as well, the two companies have said. Such a merger would bring together the brands, as well as Lynk & Co and Polestar. Geely’s new energy brand, Geometry, would also be included in the deal. Changing times Geely Holdings is trying to consolidate its automotive business as the global market adapts to new technologies, ownership patterns and governmental pressures. Last year, it announced plans to merge its engine-building business with Volvo, creating a company that would develop internal combustion units jointly. Volvo Cars and Geely will create a joint working group to prepare a proposal to their respective boards. â€²A combination of the two companies would result in a strong global group. We look forward to working with HÃ¥kan Samuelsson, president and CEO of Volvo Cars, to further investigate this opportunity with the goal to strengthen the synergies within the Group while maintaining the competitive advantage and the integrity of each brand,’ said Li Shufu, chairman of Geely Holding Group. Mergers abound Geely bought Volvo from Ford in 2010, however, since then, Shufu has kept the carmaker as a separate entity, allowing it to make its own decisions without much interference from the Chinese group. However, with its owners recently investing more into the model range, and with the industry going through a period of compression as other carmakers look to forge new partnerships, the chairman has decided the time is right to bring its biggest non-domestic brand back under control. Alongside Volvo, Geely has been building up an extensive portfolio of non-Chinese carmakers. As well as full ownership of London black-cab maker LEVC, the company also owns 49% of Lotus Cars and has a stake in Malaysia’s Proton. Shufu also has a 9% stake in Daimler, making him the German carmaker’s biggest shareholder and allowing him to engineer a deal for the Chinese manufacturer to buy 50% of Smart. Geely was also in talks to acquire Aston Martin, although this deal was later called off. Geely sold 1.4 million cars globally last year, while Volvo managed around 700,000. Therefore, a merger between the two businesses would allow the combined carmaker to rival European giants such as BMW. Any deal would keep the identity of all carmakers included, the group added. The announcement comes 18 months after Volvo Cars abandoned an attempt to list independently.