Volvo Cars and Geely Automobile are planning on merging, giving Volvo greater access to public lists and they will be listed in Hong Kong and probably Stockholm.
In 2010, Geely Automobile’s parent company Zhejiang Geely Holding Group brought Volvo from Ford. The new entity, along with electric premium brand Polestar and Geometry (Geely’s new energy brand) will have five brands producing affordable sedans to luxury sports cars, making this China’s first global carmaker, analysts said.
“Strategically, the deal feels like – after years of deal-making – a first move by Chairman Li Shufu to consolidate his sprawling automotive empire and to pay off some of the debt that had built up,” analysts at Bernstein said.
However, it is unclear how much Geely’s valuation will be increased by this merger, with Geely valued at $16 million in a Hong Kong listing. In 2019, it sold 1.36 million cars and aims to sell 1.4 million this year, Volvo sold a mere 700,000 cars last year.
The companies in a statement said that they will be forming a joint working group to create a proposal for their respective boards.
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