Volvo In Merger Talks With Geely As The Two Consider Joining Businesses

Volvo and Geely Automobile are thinking about combining their businesses in order to create a strong global group, thus accelerating the financial and technological synergies between the two carmakers.

According to Volvo, such a merger would have the scale, knowledge and resources “to be a leader in the ongoing transformation of the automotive industry.” Furthermore, the move would still preserve the identity of each individual brand: Volvo, Geely, Lynk & Co and Polestar.

Also, a financial entity made up of both Volvo and Geely could access the global capital market through Hong Kong as well as Stockholm – though the latter would happen at a later date.

Read Also: Volvo And Geely To Merge Internal Combustion Engine Operations

“A combination of the two companies would result in a strong global group. We look forward to working with Hakan Samuelsson, president and CEO of Volvo Cars, to further investigate this opportunity with the goal to strengthen the synergies within the Group while maintaining the competitive advantage and the integrity of each individual brand,” stated Geely chairman Li Shufu.

Any transaction between the two entities would have to comply with the rules governing the Listing of Securities on the Stock Exchange of Hong Kong Limited, and “be subject to mutually agreed terms and conditions, approvals of the respective boards and shareholders of Geely and Volvo Cars, regulatory approvals and prevailing market conditions.”

At this time, no concrete timetable or detailed plans of the proposed transaction have been formed, and since talks are only in a preliminary phase, a merger between the two brands might not even happen.

Back in October of last year, Volvo and Geely agreed to merge their internal combustion engine operations so as to establish “a new global supplier that will seek to develop next-gen combustion engines and hybrid powertrains.”