HONG KONG/SHANGHAI (Reuters) – Chinese premium electric vehicle maker Zeekr plans to take control of Lynk & Co, a sister brand owned by Geely and Volvo (OTC:VLVLY) Cars, two sources with direct knowledge of the matter said.
The move is part of efforts by Geely Holding, which is the parent company of all three automakers, to streamline its operations and reduce costs.
Zeekr will purchase Volvo Cars’ 30% stake in Lynk and a 20% stake from Geely Holding, said the sources who declined to be identified as the discussions were private.
The deal would see both Volvo and Geely Holding fully exit from Lynk & Co and values the Chinese-Swedish brand at around 18 billion yuan ($2.5 billion), said one of the sources.
Zeekr plans to nudge its stake up to 51% with a capital injection while Geely Automobile Holdings (OTC:GELYF), Geely Holding’s main listed arm, will continue to hold the rest, the person said, adding that the deal is expected to be completed by June next year.
Geely Holding declined to comment.
Details of the deal have not previously been reported.
($1 = 7.2425 Chinese yuan)