HONG KONG/SHANGHAI (Reuters) -China’s Geely stated on Thursday its premium electrical automobile maker Zeekr plans to take management of Lynk & Co, a sister model – the primary large restructuring transfer in a deliberate overhaul for the sprawling automotive group.
Geely Holding, which owns the 2 marques in addition to 10 different automotive manufacturers, has pivoted away from its historical past of aggressive acquisitions to streamlining its operations and chopping prices.
Group Chairman Eric Li informed workers in September that deep integration was wanted to enhance effectivity and scale back prices. All manufacturers within the group ought to make clear how their fashions are positioned in order that overlap will be averted, he added.
Zeekr and Lynk have been criticised for having some related merchandise and pricing, cannibalising one another’s gross sales.
Geely stated it desires Zeekr and Lynk to type a brand new vitality automobile manufacturing group with mixed annual gross sales of a couple of million items. That compares with about 339,000 automobiles for the 2 manufacturers in 2023.
Below the deal, Zeekr will buy a 30% stake from one other group agency, Volvo (OTC:) Vehicles, and a 20% stake from Geely Holding, the group stated in an announcement.
Shares in Volvo Vehicles have been up 3.5% in early commerce, among the many greatest gainers on the pan-European index.
Zeekr will then nudge its stake as much as 51% with a capital injection whereas Geely Car Holdings (OTC:), the group’s fundamental listed arm, will proceed to personal the remainder.
The deal values Lynk, a Chinese language-Swedish model, at round 18 billion yuan ($2.5 billion). It must be accomplished by June subsequent 12 months, an individual with direct information of the plans stated.
Particulars of the transaction have been first reported by Reuters.
Inside the group, Zeekr is predicted to steer innovation for electrical and linked automobiles, sharing that analysis with different manufacturers together with Lynk and Polestar (NASDAQ:), stated the particular person and a one other supply with direct information of the plans.
Lynk’s product group began to report back to Zeekr CEO Andy An final week and there have been discussions about leveraging extra applied sciences and elements that the 2 automakers share, one of many folks stated.
Geely declined to touch upon the knowledge from sources.
Lynk’s two newest EV fashions, the Z10 and Z20, share the identical structure utilized by Zeekr’s automobiles whereas its gasoline and hybrid fashions use completely different platforms developed by Geely and Volvo Vehicles.
Lynk, which was launched in 2016 and at present has 9 fashions, bought roughly 195,600 automobiles within the first 9 months of the 12 months, a 40% improve over the identical interval a 12 months in the past.
By comparability, Zeekr, a three-year-old model, bought nearly 143,000 automobiles throughout January to September with six fashions, up 81%.
Zeekr listed in New York in Might and has seen its shares climb nearly 40% since then, giving it a market worth of $7.3 billion.
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