(Bloomberg) -- Two electric-car makers within Geely Holding Group will combine as the sprawling empire overseen by Chinese billionaire Li Shufu streamlines its portfolio of EV brands.
Geely’s Zeekr Intelligent Technology Holding Ltd., which in May staged the biggest US listing by a China-based company in three years, will acquire a majority stake in Lynk & Co in a transaction valuing the latter EV maker at 18.33 billion yuan ($2.5 billion), according to a filing.
The integration will curtail some of the cross-competition within the Geely Group, which has been eclipsed the last few years by China’s BYD Co. despite Li having spent more than a decade snapping up recognizable international brands. His acquisition spree has spanned the Swedish car marques Volvo and Polestar, British badged Lotus sports cars, and the German city car brand Smart.
Zeekr will amass the majority holding in Lynk & Co by buying a 30% stake from Volvo Car AB for 5.4 billion yuan. It will acquire another 20% interest from Geely Holding for 3.6 billion yuan, the companies said.
Zeekr will then bump its stake in Lynk & Co up to 51% by providing a 367.3 million yuan cash injection, the filing shows.
Volvo Car shares jumped as much as 6.4% on Thursday in Stockholm. Zeekr’s American depositary shares fell as much as 5.6% before the start of regular trading in New York.
Li signaled a shake-up was coming in a document called the Taizhou Declaration in September. He wrote that Geely Holding would go through a strategic realignment and focus on the transition toward electric, intelligent and connected vehicles.
Geely and Volvo started Lynk & Co in 2016 to experiment with direct-to-consumer sales and car subscriptions. Its value proposition was muddied somewhat by other brands within the group, including Volvo, trying out similar sales models, and car-subscription offerings have yet to catch on with consumers.
The holding company announced the plan to combine Zeekr and Lynk & Co after Geely Automobile Holdings Ltd. reported earlier Thursday that net income almost doubled to 2.46 billion yuan in the quarter that ended in September. Revenue jumped 20%, and the company confirmed it’s on track to sell 2 million cars this year.
(Updates with details of the transaction starting in the second paragraph.)
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