Volvo and Geely in early 2020 said they were considering a full merger to further boost synergies in the areas of technology sharing and capital raising. Fast forward to today and the two companies say they can still fully benefit from cooperating without merging.
“Having evaluated different options to realize value, [Volvo and Geely] concluded jointly that a collaboration model between two standalone companies is the best way to secure continued growth and at the same time achieve technological synergies in many areas,” Hakan Samuelsson, Volvo's CEO, said in a statement.
The companies originally considered the merger as a means to boost their capital raising efforts should the merged entity be made a public company. In their 2020 announcement, Volvo and Geely said a merged company would have access to the global capital market by listing in both China and Sweden.
Volvo had planned to go public on its own in 2018 but called off the move because of concerns of the escalating trade war at the time between the United States and China and also between the U.S. and Europe.
Volvo is already a subsidiary of Geely, with the Chinese auto giant snapping up the Swedish automaker from Ford back in 2010. With Geely's help, Volvo has transformed into a legitimate rival to the German luxury brands and is returning record sales and profits.
Even without the merger, Volvo and Geely plan deep collaboration in the areas of powertrain, vehicle platforms, procurement, sales, and self-driving technology. Some specific plans including the sharing of the SEA (Geely) and SPA2 (Volvo) platforms, the merger of internal-combustion engine and hybrid powertrain developing into a new company, co-developing self-driving technology under the lead of Volvo's Zenseact self-driving division, and the sharing of Volvo's dealer network for the global expansion of Geely's Lynk & Co. brand.