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Zhejiang Geely Holding Group [GEELY.UL], Geely Automobile's
parent group, acquired Volvo from Ford Motor Co <F.N> in 2010.
The combined company would have "the scale, knowledge and
resources to be a leader in the ongoing transformation of the
automotive industry", according to the statement.
The combination of two businesses would bring together brands
including Volvo, Geely, Lynk & Co and Polestar. Geely's new
energy brand Geometry will also be included, a company spokesman
confirmed.
There had been previous discussions about listing Volvo https://www.reuters.com/article/us-volvo-cars-ipo/volvo-cars-drops-ipo-due-to-trade-tensions-and-auto-stocks-downturn-idUSKCN1LQ0IO
as a separate company in Stockholm but these were put on hold in
2018.
The parent group, led by billionaire Li Shufu, which has a
number of other investments including a 9.7% stake in Daimler <DAIGn.DE>
acquired in 2018, a 49.9% stake in Proton in 2017 and majority
stake in British sport car brand Lotus, is trying to consolidate
assets as the industry adjusts to tougher emissions rules and
the rise in demand electric cars.
Last year, Volkswagen <VOWG_p.DE> and Ford said they will spend
billions of dollars to jointly develop electric and self-driving
vehicles, while FCA <FCHA.MI> and PSA <PEUP.PA> agreed a $50
billion merger to create the world's fourth-biggest automaker.
In October, Volvo Cars said it would merge its engine
development and manufacturing assets with those of parent Geely,
creating a division to supply Lotus, LEVC, Lynk and Proton, and
also potential rivals with next-generation combustion and hybrid
engines.
Geely Automobile sold 1.36 million cars in 2019 and aims to sell
1.4 million cars this year. Volvo sold just over 700,000 cars
last year.
(This story has been refiled to add dropped word, paragraph
seven.)
(Reporting by Yilei Sun in Beijing, Anushka Trivedi in Bengaluru;
Editing by Keith Weir and Louise Heavens)
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