Geely acquires 8.2% stake in Volvo trucks

Zhejiang Geely Holding Group has purchased shares of AB Volvo, the trucks division of Volvo from Cevian Capital, an investment firm at an estimated price of US$ 3.3 billion. The transaction makes Geely the largest individual stakeholder in the truck maker as well as the second largest in terms of voting rights.

According to Cevian Capital, the firm made a profit in the truck company on its investments since 2006. They will now use the proceeds of this sale to buy another company.

This acquisition should help Volvo trucks expand into the Chinese market, where Geely is known to have a local presence. It will also likely help in the development of vehicles in electric and autonomous vehicle segments. Further, AB Volvo owns 45% of the Dongfeng Commercial Vehicles - currently one of the biggest truck manufacturers in China with a presence in the construction equipment segment as well.

Volvo Cars split from AB Volvo back in 1991. Geely had acquired the car business from Ford in 2011. According to a media report Geely has revealed that the company has no plans to merge the truck and car companies. Last month, [URL="http://www.team-bhp.com/news/daimler-turns-down-geelys-offer-buy-5-stake-it"]Daimler had turned down Geely's offer[/URL] to buy a 5% stake in it.

Source - Reuters