Talks on a merger between Volvo Cars and Geely Auto – a subsidiary of Zhejiang Geely Holding Group (ZGH) – have been put on hold until the first quarter of next year. The resumption of discussions was previously set to take place in the autumn of this year, which is around September, but this has been pushed back yet again as Geely is seeking to get itself listed on Shanghai’s New Star Market.
Speaking to Automotive News Europe, Volvo CEO Hakan Samuelsson said due to the listing process, the Chinese automaker is currently prohibited from making any changes to its capital structure, resulting in the delay. “Quarter one is more realistic next year. We have said we are looking at a combination and it could be done in different ways. Platform sharing and so on,” Samuelsson said.
He added that the identities of each company would be preserved despite a merger and Volvo wants to continue to be able to access markets, in order to raise funds for investments in low-emissions vehicles. This will be important in the brand’s plans to become an electric-only brand by 2030.
The company emerging from the merger would be able to tap into the global capital market through Hong Kong and with the intention to be subsequently publicly listed in Stockholm as well. The latter was planned by Volvo in the past, although nothing came into fruition due to trade tensions and slump in automotive stocks globally.
“Volvo is of course very proud… and Geely is very proud of their brand, and they of course also don’t want to be part of a more European constellation. It is an opportunity to form some sort of an alliance,” Samuelsson commented, adding that Geely’s has plenty of efficient suppliers in China and that there is potential to do more together.
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