Volvo to buy parent company Zhejiang Geely Holding

Volvo Cars have struck a deal to purchase parent company Zhejiang Geely Holding from their joint ventures in China.

Geely, which also owns a 9.7% stake in Daimler, said this year that it was considering options for Volvo, including an IPO and stock market listing. In February, Geely’s Hong Kong-listed unit Geely Automobile and Volvo Cars dropped plans to merge.

Analysts expect other foreign automakers to go for such deals in China when the country’s requirement for auto manufacturing to be carried out with a local joint venture partner is lifted by 2022.

Volvo Cars’ deal, financial terms for which were not released.

The deal will give Volvo full ownership of its manufacturing plants in Chengdu and Daqing, its Chinese sales company, and its research and development facility located in Shanghai.