Volvo, Geely may merge to form single business

Europe

China’s Geely Automobile and Volvo Cars said they are considering combining their businesses to accelerate financial and technological synergies between the two automakers.

“A combination of the two companies would result in a strong global group,” Li Shufu, chairman of Geely Holding Group, said in a news release on  Monday.

The goal is to strengthen the synergies within the group while maintaining the competitive advantage and the integrity of each individual brand, Shufu said.

The combined business would be listed in Stockholm as well as in Hong Kong, where Geely Automobile trades now.

The combination of two companies would have brands including Volvo, Geely, Lynk & CO and Polestar. Geely’s new energy brand Geometry will also be included.

Volvo and Geely will create a joint working group to prepare a proposal to their respective boards.

Zhejiang Geely Holding Group, Geely Automobile’s parent group, acquired Volvo from Ford Motor in 2010.

In September 2018, Volvo Cars CEO Hakan Samuelsson said the company would delay a planned initial public offering because market conditions had turned unpredictable amid growing global trade tensions.

The transaction would advance a theme of global consolidation that has picked up in the past year and has been championed by Li, the billionaire founder of Geely, as a way to pool resources for initiatives such as electrification and automated driving.

Volkswagen Group and Ford Motor agreed to cooperate in a broad agreement last year, and Fiat Chrysler Automobiles is set to merge with PSA Group, owner of the Peugeot brand.

Reuters and Bloomberg contributed to this report

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