Volvo Vehicles to take full management of its Chinese language enterprise

STOCKHOLM, July 21 (Reuters) – Volvo Automotive Group has struck a deal to purchase out father or mother firm Geely Holding from their joint ventures in China, in a transfer that would make a possible preliminary public providing (IPO) for the Swedish automaker extra enticing to buyers.

Geely stated earlier this 12 months it was contemplating choices for Volvo, together with an IPO and inventory market itemizing.

“These two transactions will create a clearer possession construction inside each Volvo Vehicles and Geely Holding,” Geely Holding CEO Daniel Donghui Li stated in an announcement, which didn’t confer with the attainable IPO.

Analysts count on different overseas automakers to strike related offers in China, the world’s greatest automotive market, when the nation’s requirement for auto manufacturing to be carried out with an area three way partnership associate is lifted subsequent 12 months.

Volvo’s deal, monetary phrases for which weren’t disclosed, will give it full possession of its manufacturing vegetation in Chengdu and Daqing, its Chinese language gross sales firm and its analysis and improvement facility in Shanghai.

The Gothenburg-based firm was purchased by Zhejiang Geely Holding Group (GEELY.UL) from Ford (F.N) within the aftermath of the worldwide monetary disaster greater than a decade in the past, and has since shared possession of its Chinese language vegetation with its father or mother.

Volvo stated the transactions, that are topic to regulatory approval, can be carried out in two steps, beginning in 2022 and seen formally accomplished in 2023.

Whereas all the time aware of preserving its standing as premium Western auto model, Volvo’s enterprise in China has grown quickly and assuming full possession of its manufacturing there might make a possible IPO extra interesting to buyers.

Volvo CEO Hakan Samuelsson stated in June the corporate was making progress in the direction of a attainable IPO later in 2021, and that whereas it might proceed to share platforms and parts with Geely, they’d accomplish that at “an arm’s size distance,” per the way in which unbiased firms do enterprise.

Reporting by Niklas Pollard
Enhancing by Anna Ringstrom and Mark Potter

Our Requirements: The Thomson Reuters Belief Rules.


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