When Ford bought Volvo Cars from AB Volvo in 1999, it damaged both the car line and the commercial vehicle operations. Thankfully, however, that gross, Ford-era cash grab is over now. Flush with capital and manufacturing muscle from China’s Geely Holdings Group, Volvo has gone from strength to strength since the introduction of the hugely successful launch of the 2015 MY XC90, bringing the Scandinavian carmaker back to its former glory. It seems, that Geely won’t stop righting Ford’s wrongs there, though: Geely is buying AB Volvo, thereby reuniting the Volvo brands!

As reported by the New York Times, the deal- which closed just before the close of 2017- is valued at some $3.2 billion, and would make Geely easily the truck maker’s largest shareholder with more than 8% of AB Volvo’s total shares.

The Times speculates that Geely’s investment in the Swedish commercial group is one of the latest signs that Chinese companies are still on the lookout for overseas investment opportunities. Provided, of course, that those opportunities fall in line with the government’s strategic goals. Those goals mean China would likely approve acquisitions by “qualified companies” and encourage deals that supported the “One Belt, One Road” initiative, President Xi Jinping’s ambitious push to increase China’s influence through infrastructure projects across Asia, Africa and Europe. All projects that, you know, could use a biga** Volvo tractor, right? (Right!)

You can check out Geely’s official announcement for the most recent of their big purchases, below, then let us know what you think of the reunification of Volvo’s brands in the comments section at the bottom of the page. Enjoy!


Geely Holding Acquires Strategic Stake in AB Volvo

27 December 2017, Hangzhou, China. Zhejiang Geely Holding Group (Geely Holding), China’s leading privately-owned automotive group, today announced it has reached agreement with Cevian Capital (Cevian), Europe’s largest activist fund manager, to acquire its entire 8.2% share capital holding and 15.6% voting rights in AB Volvo, the leading Swedish manufacturer of trucks, buses, construction equipment, diesel engines, and marine and industrial engines.

Under the terms of an agreement signed by Daniel Donghui Li, Chief Financial Officer and Executive Vice President of Geely Holding and Cevian in the presence of Christer Gardell, co-founder of Cevian, Geely Holding has committed to acquire Cevian’s 88.47 million A-shares and 78.77 million B shares in AB Volvo. On completion and following necessary regulatory approvals, Geely Holding will become the largest holder of AB Volvo’s share capital.

The strategic investment follows Geely Holding’s 2010 acquisition of Volvo Car Group from Ford Motor Company, and will form part of an automotive manufacturing and investment portfolio that also includes a controlling stake in Geely Auto Group (Geely Auto: HK 0175) 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.

Geely Holding Chairman Li Shufu said: “We are delighted to have reached agreement with Cevian to acquire its holding in AB Volvo, making us the largest holder of share capital in a company that leads the world in many aspects of commercial vehicle development, manufacturing and sales. Given our experience with Volvo Car Group, we recognise and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo. We will support the Board of Directors and the management of AB Volvo in their continued execution of the current strategy.”


AB Volvo Includes Bus and Tractor Divisions

Christer Gardell, co-founder of Cevian, said: “Today’s announcement concludes over 11 years ownership in AB Volvo by Cevian. During Cevian’s ownership, AB Volvo has been transformed into a more competitive and valuable company through strengthened governance, improved efficiency and increased focus on its core business. This is reflected in structurally improved profitability and a higher market value. We are proud to have played a role in this positive development. AB Volvo is now leading the industry into a new era. The agreement will not only give AB Volvo a new large and committed shareholder, but one with significant expertise in strategically important areas for future value-creation.”

Daniel Donghui Li, Chief Financial Officer and Executive Vice President of Geely Holding, added: “Geely Holding is a well-recognised strategic long-term investor, and as such we aim to contribute positively to the long-term development of AB Volvo. 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.”

Under the terms of the agreement reached, Cevian Capital has agreed to sell all of its 88.47 million A-shares and 78.77 million B-shares in AB Volvo to both Nomura International Plc and Barclays Bank Plc. Nomura International Plc and Barclays Bank Plc have committed to sell all the shares to Geely Holding, and Geely Holding has committed to acquire the shares following necessary regulatory approvals.


Source | Images: Geely, via the New York Times.