Volvo Cars, Geely Automobile Scrap Merger Plans in Favor of Collaboration
By Dominic Chopping
STOCKHOLM--Volvo Car Corp. and Geely Automobile Holdings Ltd.
said Wednesday that they have decided against a previously touted
merger, instead favoring a broad collaboration to share technology
and deliver synergies.
"This brings all the benefits of a merger without the
disadvantages that could come. It's the best outcome for Geely cars
but also for Volvo," said Volvo Cars Chief Executive Hakan
Talks over a potential combination of the auto makers--both of
which are owned by billionaire Li Shufu's investment fund Zhejiang
Geely Holding Group--were announced a year ago. Had the plan been
approved, the combined company was expected to be listed in Hong
Kong and possibly Stockholm.
Mr. Samuelsson said an initial public offering for Volvo remains
an option, but it isn't something the company has made a decision
The collaboration with Geely Automobile will see the companies
combine their powertrain operations into a new standalone company
which will provide internal combustion engines, transmissions, and
next-generation dual-motor hybrid systems for use by both companies
as well as other manufacturers.
The agreement will also see Volvo Cars and Geely Automobile
expand the use of shared modular architectures for electric
vehicles, enhance their collaboration in autonomous and electric
drive technologies and combine for joint procurement to cut
Both companies will retain independent corporate structures but
the collaboration will be overseen by a new governance model,
supported by Geely Holding, the lead shareholder in both
Chinese-Swedish auto maker Lynk & Co. will expand globally
by utilizing Volvo's distribution and service network, they
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(END) Dow Jones Newswires
February 24, 2021 09:28 ET (14:28 GMT)
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