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Volvo Cars' Chinese parent company buys $3.3 billion worth of AB Volvo

Volvo Cars' Chinese parent company buys $3.3 billion worth of AB Volvo

By Benny Kung Nikkei Markets Rewrites throughout, adds comments from executives, background, context HONG KONG (Dec 27) - Zhejiang Geely Holding Group agreed to buy the entire 8.2% stake of activist investor Cevian Capital in Swedish automaker AB Volvo for an undisclosed amount, expanding the Chinese automaker's foothold in Europe. The vehicle business made an operating profit of 10.4 billion Swedish crowns in the first nine months this year, up from 1.6 billion for the whole of 2011, the year after Geely bought Volvo from Ford.

Geely's expertise in the Chinese market and skills in developing electric and autonomous vehicles should help the truckmaker to expand, although there were no plans to reunite with Volvo Cars, which was split from AB Volvo in 1999.

The deal will make Geely the largest individual shareholder in AB Volvo.

How the deal impacts Volvo's relationship with Chinese truck maker Dongfeng, in which Volvo has owned a 45% stake since 2015, is unclear. Geely also owns the company that makes London's black cabs and bought British sports carmaker Lotus back in August.

The value of the transaction was not revealed.

Texas jobless rate drops to lowest in 40 years
The county unemployment rates for November 2017 will be published on Thursday, December 28th, at 1:30pm CT. The leisure and hospitality segment lost about 1,700 jobs in November, compared with October.

Volvo's B shares traded 0.8 percent higher for the day at 0935 GMT, while Industrivarden's shares were flat.

Lynk & Co, a joint venture between Volvo Cars and its parent group Geely, started selling its first model last month, joining the competition in the mainland's mainstream auto segment which is dominated by foreign brands including Volkswagen, General Motors, Ford and Toyota.

Geely would support Volvo management's current strategy, Li said.

Geely will take control of 88.47m of A-shares and 78.77m of B-shares, giving it control of 15.6% of the votes.

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.

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