China’s Geely Holding is acquiring an 8.2 percent stake of commercial truck maker Volvo Trucks. The investment marks the company’s second investment into Swedish vehicle brands as Geely is the current owner of Volvo Cars.
Geely is purchasing its stake from activist investment firm Cevian Capital. The deal is valued at about $3.3 billion at current market prices, but neither firm is confirming the actual price tag. Once the transaction is complete, Geely will be the largest shareholder of Volvo Trucks, but the second-largest voting member of the firm.
Prior to 1999 Volvo Trucks and Volvo Cars were both part of the AB Volvo organization. The two split off and have been separate entities every since. Despite the history between the two, Geely is already saying that it has no immediate plans to combine its two Swedish organizations in any capacity.
Geely has fairly expensive experience in autonomous and electrification technology, traits that are likely of high appeal to the Volvo Trucks organization. The company’s market experience in its home market China is also likely a consideration in the deal.
This isn’t AB Volvo’s first Chinese venture. The company already owns a 45 percent stake in Dongfeng Commercial Vehicles, which is China’s largest truck maker.