Geely plans to divest Volvo B shares, with a transaction value of $1.3 billion
Geely plans to divest Volvo B shares, with a transaction value of USD 1.3 billion. Geely will remain the second largest investor in Volvo, holding 88.5 million A shares. Geely stated that this divestment aligns with its long-term strategy. Geely sold 49.5 million shares through Bank of America Securities, Goldman Sachs Europe, and Barclays, with a guided price of SEK 285.9 per share. Volvo's first-quarter operating profit exceeded expectations, and the stock price has already risen by 12% this year
Zhejiang Geely Holding Group announced on Thursday that it plans to divest its B shares in the car manufacturer Volvo Group, with the total transaction value calculated at 14.46 billion Swedish Krona (1.32 billion USD) based on the closing price in the Stockholm market.
Geely stated in the announcement on Thursday that the sale "is in line with its long-term strategy." After the divestment of B shares, Geely will remain the second largest investor in Volvo, holding 88.5 million A shares. Geely reduced its stake in Volvo in January this year and sold some of its Volvo holdings in November last year.
"Geely Holding's strategic adjustment this time and incorporating Volvo Group into its automotive manufacturing and investment portfolio are part of the group's risk management and diversified investment strategy," the company stated.
According to the terms of the transaction, Geely sold 49.5 million shares through Bank of America Securities, Goldman Sachs Europe, and Barclays. The indicative price for the Volvo B shares in this sale is 285.9 Swedish Krona per share, more than 2% lower than the closing price.
Volvo reported first-quarter operating profit on Wednesday that exceeded analysts' expectations, as the company offset the impact of reduced orders by raising prices. Volvo has already reduced production as demand returns to more typical levels after being disrupted by the pandemic. The company's stock price has risen by 12% this year