finance news

The Chinese car manufacturer Geely set to merge with its Volvo Cars business

The Chinese car manufacturer Geely set to merge with its Volvo Cars business
The Chinese car manufacturer Geely set to merge with its Volvo Cars business

Volvo Cars, a Swedish automaker along with its owner, Geely Holding, a Chinese automaker reportedly announced that they are planning to combine their businesses in order to create a firm capable of accelerating technological and financial synergies between both the companies.

The proposal has been made at a time when different carmakers have been receiving major investments for the development of electric cars that meet strict limits for CO2, especially in Europe and China, including major technological innovations like driverless vehicles.

  • The merger deal shall boost their technological and financial synergy
  • Combining the firms shall also protect the individual identity of every brand

Both companies jointly stated that any combined group will have the knowledge, resources and scale to be a leader in the current transformation of the automotive sector. It will be listed on Hong Kong Stock Exchange accompanied by the intention to later be listed in the Stockholm Exchange.

Seemingly, a combined firm will help preserve the individual identity of every brand like Geely, Volvo, Lynk & Co as well as Polestar, an electric band of Volvo.

According to reliable sources, the companies will be creating a joint working group in order to prepare a proposal for their boards. The deal will be depending on the approval of the boards, the regulators and the shareholders of Volvo Cars and Geely.

While Volvo Cars has been based in Goteborg, Sweden, Geely, however, owned the company since 2010. Volvo Cars is separate from AB Volvo, a truckmaker, and had witnessed sales of 705,452 cars in about 100 counties in the previous year. It has nearly 41,500 employees who work full-time in plants located in Belgium, Daqing,  Zhangjiakou and Chengdu in China; South Carolina in the United States and Belgium.

For the record, Geely is originally headquartered in Hangzhou. The auto unit of the company is essentially made up of different brands like Geometry, Proton, Lotus, Geely Auto and Lynk & Co. The company had also bought the London Electric Vehicle Company, a British taxi maker in 2013.

Source Credit- https://apnews.com/2e644d2d98c85d0b71879e706fe04866