Economy

Geely Holding To Buy Stakes In AB Volvo

Geely Holding To Buy Stakes In AB Volvo

Chinese vehicle maker Zhejiang Geely Holding Group said Wednesday that it would by a $3.23 billion stake in Swedish truck and bus company Volvo AB, another sign of Chinese companies' appetite for global auto assets, The Wall Street Journal reports.

Earlier this year, Geely bought 49.90% of Malaysian auto business Proto and 51% of Lotus (owned by Proton) and in 2013 Geely saved the struggling London Taxi Company after purchasing it.

"We recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo", Geely chairman Li Shufu (李書福) said in a statement.

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.

Chinese firm Geely, the maker of London's iconic black cabs and the owner of Volvo cars, has snapped up a stake in the Volvo truck business.

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Christer Gardell, Cevian's co-founder, said the activist was happy to have helped the Volvo Group become a more competitive and valuable company. "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".

The value of the transaction was not revealed. 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.

This move by Geely continues the company's trend of acquisitions over the last few years.

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.