The Strategist

Geely and Volvo set to merge businesses

02/11/2020 - 08:00

Swedish Volvo Cars AB and its parent organization, the Chinese Geely Automobile Holdings, have begun to explore the possibility of combining businesses and creating a global group that will accelerate the financial and technological interaction of the two structures, according to Volvo’s press release.

The combined company will have access to the global capital market through Hong Kong. Listing of its shares in Stockholm is also possible in the future. The parties plan to keep all current car brands: Volvo, Geely, Lynk & Co. and Polestar.

A joint working group will prepare proposals for the merger.

Prior to the publication of this announcement, Geely's stock price in Hong Kong grew by 1.5%. The company's capitalization exceeds 124 billion Hong Kong dollars (about $ 16 billion).

Geely is an automotive group that owns a number of well-known brands, including Geely Auto, Lynk & Co, Volvo Cars, Lotus Cars, Polestar, London Electric Vehicle Company (LEVC) and others. Geely has more than 52,400 employees. In 2019, the company's sales amounted to about 1.362 million cars, a decrease of 9%.

Volvo Cars was established in 1927. Last year, 705,450 cars of this brand were sold in approximately 100 countries, which is 9.8% more than a year earlier. Its staff comprises about 41,500 people.

Geely has been the owner of Volvo Cars since 2010.