China’s billionaire Li Shufu turns gaze on Volvo trucks after cars1 min read . Updated: 29 Dec 2017, 12:58 AM IST
Li's Zhejiang Geely Holding Group plans to buy a stake in Volvo AB from activist investor Cevian Capital, making it the truckmaker's largest shareholder
Beijing/Stockholm: About a decade after Chinese billionaire Li Shufu bought the Volvo Car nameplate from Ford Motor Co. and revived the brand, he’s turning his attention to the Swedish company’s heavy vehicles in a bid to bulk up outside China.
Li’s Zhejiang Geely Holding Group Co. said on Wednesday it plans to buy a stake in Volvo AB from activist investor Cevian Capital AB, making it the truckmaker’s largest shareholder. The deal is valued at about €3.25 billion ($3.9 billion), people familiar with the matter said separately, verifying a figure reported earlier by Swedish newspaper Dagens Nyheter.
The stake, representing 8.2% of Volvo’s capital and 15.6% of the votes, would mark Hangzhou-based Geely’s first foray into the heavy-truck segment. In addition to its namesake heavy-vehicle brand, Volvo AB’s marques include Mack, Renault Trucks and UD.
The Chinese automaker, which is in a race to develop technologies such as autonomous driving, electrification and connectivity, this year bought a 49.9% stake in Malaysia’s Proton Holdings Bhd. as well as 51% of British sports-car maker Lotus Cars.
“Geely is becoming a full-range transportation company and seems to be defining itself as a company that moves people and things," said Bill Russo, managing director (MD) of Gao Feng Advisory Co. and a former head of Fiat Chrysler Automobiles NV’s Chrysler unit in China. “Any device that does this is on their radar."
Geely Automobile Holdings Ltd., the group’s Hong Kong-listed stock, gained as much as 4.7% on Thursday to HK$27, the highest intraday level since 6 December.
The shares were up 3.9% as of 1:09pm in Hong Kong. Volvo’s Class B shares fell 2.9% to 155.40 kronor in Stockholm on Wednesday.
Geely plans to buy Cevian’s 88.5 million Class A Volvo shares and 78.8 million Class B shares, the two companies said on Wednesday. Bloomberg