Volvo Cars and its owner Geely Holding stated Monday they are thinking about combining their businesses to form a company that would speed up “financial and technological synergies between the two companies”.
A combined company would maintain the unique identity of each of the brands Volvo, Geely, Lynk & Co and Polestar, Volvo’s electric brand.
The proposal surfaced when automakers have to make huge investments to develop electric vehicles in order to meet tougher CO2 emissions limits in many parts of the world including China and Europe. Their scope also includes other technological advancement like driverless vehicles.
In a joint statement, the two companies stated that a combined company “would have the scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry”.
It would be make a list on the Hong Kong Stock Exchange and with the motive “to subsequently list in Stockholm as well”.
The two will form a joint working group to plan a proposal for their respective boards. A deal would be subject to the approval by the boards and shareholders of both automakers, as well as by regulators.
Volvo Cars is headquartered in Goteborg, Sweden. It was purchased by Geely Holding from Ford Motor in 2010.
In 2019, the worldwide sales for Volvo Cars, which is independent from truckmaker AB Volvo, reached a record 705,452 cars throughout some 100 countries. It has about 41,500 (41,500) full-time workers with plants located in Sweden, Belgium, South Carolina in the United States; and Chengdu, Daqing and Zhangjiakou in China.
Geely Holding’s headquarter is located in Hangzhou. Its Geely Auto unit is comprised of the brands Geely Auto, Geometry, Lynk & Co, Proton, and Lotus. The company is also the owner of British taxi maker The London Electric Vehicle Company since 2013. The group sold more than 1.5 million cars in 2018.