Volvo and its parent company Geely are considering a merger to create a new global automotive group.
Combining the businesses could accelerate financial and technological synergies between the two companies, giving them a stronger position in the global market.
Investment in electrification, autonomous driving and connectivity could be increased if the companies were to merge.
Geely Holding Group has owned Volvo since 2010, but remains separate from Geely Automotive. The latter owns LEVC, Lynk&Co, Proton and Lotus.
The proposed deal would see all the Geely brands merge in one new group, building around two million cars per year.
“A combination of the two companies would result in a strong global group. We look forward to working with Håkan Samuelsson, president and CEO of Volvo Cars, to further investigate this opportunity with the goal to strengthen the synergies within the Group while maintaining the competitive advantage and the integrity of each individual brand,” said Li Shufu, chairman of Geely Holding Group.
The considered combination would have the “scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry”, according to a statement released today.
The new group, if formed, would have access to the global capital market through Hong Kong and with the intention to subsequently list in Stockholm as well.
Volvo Cars and Geely will create a joint working group to prepare a proposal to their respective boards.