China's Geely turns to Volvo trucks in latest Swedish venture

The deal could be the first step to reuniting Volvo Group which makes lorries and buses with Volvo Cars

Geely Holding Group (吉利控股) on Wednesday said the acquisition of shares from Cevian Capital AB, a fund manager, would give it 8.2 percent of Volvo's share capital and 15.6 percent of the voting rights.

The Swedish company, which also makes buses, construction equipment and diesel engines, was the parent of Volvo Cars until 1999, when it was sold to Ford Motor Co.

While making a statement on the decision Geely Chairman Li Shufu said that by the virtue of its experience with Volvo Car Group, the company now totally understands and identifies itself with Scandinavian history, culture. "Geely Holding will be able to contribute its global knowledge, Chinese market expertise and leading research and development capabilities especially in the fields of electrification, autonomous driving and connectivity, to AB Volvo to further its global development, and strengthen the Volvo brand". It purchased The London Electric Cab Co. along with majority stakes in PROTON Holdings and Lotus Cars.

In May, Geely agreed to buy a 51% stake in British sports-car brand Lotus and a 49.9% stake in struggling Malaysian auto maker Proton Holding, which gave it a foothold in Southeast Asia.

Geely will take over all the shares from Nomura and Barclays following necessary regulatory approvals.

The transaction will make Geely the biggest single shareholder in Volvo and the second biggest holder of voting rights.

"We will treat the new owners in the same way that we treat our other shareholders", a spokesman for AB Volvo said. China already has the largest automotive sector in the world, and development of the nation's infrastructure as its economy grows is likely to fuel demand for AB Volvo's products.

Geely has also formed an electric-vehicle joint venture with Volvo Cars, pledging an investment of 5 billion yuan (US$758 million) to support Polestar-branded high-performance electric cars.

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