A busy year in trucking refuses to go out with a whimper, as new reports broke Wednesday that China’s Geely Holding is buying an 8.2% stake in Volvo Trucks. The shares will be purchased from the Cevian Capital investor group for approximately $3.3 billion, according to published reports.
Geely already owns the Volvo automobile group, which was divested from the Volvo trucking and construction business almost 20 years ago. But Geely says it has no intention of trying to reunite the two businesses.
The deal will make Geely the largest individual shareholder in AB Volvo, ranked second behind Swedish investment firm Industrivarden in terms of voting rights.
According to the deal, Geely will acquire 88.5 million A shares and 78.8 million B shares to give it 15.6% of Volvo voting rights. Industrivarden owns mostly A shares and controls 22.8% of the votes.
“Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo,” Geely Chairman Li Shufu said in a statement as the deal was announced.
Shufu noted that the deal would be mutually beneficial for both Volvo and Geely, given his company’s expertise in the Chinese commercial vehicle market and in developing electric and autonomous vehicle technologies.
Volvo also currently owns 45% of Dongfeng Commercial Vehicles, one of China’s largest truck makers, and has a significant construction equipment business in China.
According to reports by Reuters, the value of the investment amounted to around 27.2 billion Swedish crowns ($3.26 billion), although Geely and Cevian did not disclose the exact value of the transaction.