Convoy time

27 December 2017 By Liam Proud Follow @liamwardproud

Seven years after buying Volvo Cars, the Chinese group is acquiring Cevian’s 8.2 pct stake in the Swedish truckmaker. The activist gets a decent exit after 11 years, while Volvo gets help with electric vehicles and China. The risk is Geely is getting in at the top of the cycle.

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China’s Zhejiang Geely on Dec. 27 agreed to buy activist investor Cevian Capital’s 8.2 percent stake in truckmaker AB Volvo.

Geely, which already owns the Volvo Car Group, will be the largest shareholder in terms of capital and the second largest in terms of voting rights, behind Swedish investment firm Industrivarden.

AB Volvo owns 45 percent of Dongfeng Commercial Vehicles, one of China's largest truck makers, and also has a significant construction equipment business in China.

Geely is buying 88.5 million Volvo A shares and 78.8 million B shares, giving it 15.6 percent of Volvo voting rights. Industrivarden controls 22.8 percent of the votes.

Volvo shares were down 1.5 percent to 157.6 Swedish crowns at 1050 GMT on Dec. 27, valuing Geely’s stake at roughly 26.4 billion crowns ($3.2 billion).

Context News

China’s Zhejiang Geely on Dec. 27 agreed to buy activist investor Cevian Capital’s 8.2 percent stake in truckmaker AB Volvo.

Geely, which already owns the Volvo Car Group, will be the largest shareholder in terms of capital and the second largest in terms of voting rights, behind Swedish investment firm Industrivarden.

AB Volvo owns 45 percent of Dongfeng Commercial Vehicles, one of China's largest truck makers, and also has a significant construction equipment business in China.

Geely is buying 88.5 million Volvo A shares and 78.8 million B shares, giving it 15.6 percent of Volvo voting rights. Industrivarden controls 22.8 percent of the votes.

Volvo shares were down 1.5 percent to 157.6 Swedish crowns at 1050 GMT on Dec. 27, valuing Geely’s stake at roughly 26.4 billion crowns ($3.2 billion).

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