After adding Lotus, Terrafugia and a sizeable stake in Proton to its portfolio last year, holding company Zhejiang Geely is ringing in the new year with an 8.2 percent stake in AB Volvo, the maker of Volvo trucks and buses.
Zhejiang Geely on Wednesday agreed to buy the stake from investment firm Cevian Capital. It means the Chinese company is now the single biggest shareholder in AB Volvo and second in terms of voting rights behind investment firm Industrivarden.
Financial terms weren’t revealed but Reuters calculates the deal must have cost Zhejiang Geely around $3.26 billion.
Zhejiang Geely also owns the Volvo car brand but there are no plans to merge it with AB Volvo, a Zhejiang Geely spokesperson told Reuters.
The news comes just weeks after Chinese state-run media reported that Zhejiang Geely is set to buy a 3-5 percent stake in Daimler. The German auto giant is the parent of the Mercedes-Benz brand as well as several truck brands.
“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,” Zhejiang Geely Chairman Li Shufu said in a statement.
AB Volvo already has deep links with China including a 45 percent stake in Chinese truck manufacturer Dongfeng Commercial Vehicles. However, the new deal will likely see AB Volvo benefit from access to electrification and self-driving technologies being developed by Zhejiang Geely’s car brands.