HONG KONG/SHANGHAI (Reuters) -China’s Geely mentioned on Thursday its premium electrical car maker Zeekr plans to take management of Lynk & Co, a sister model – the primary massive 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 reducing prices.
Group Chairman Eric Li advised employees in September that deep integration was wanted to enhance effectivity and cut 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 comparable merchandise and pricing, cannibalising one another’s gross sales.
Geely mentioned it needs Zeekr and Lynk to kind a brand new power car manufacturing group with mixed annual gross sales of multiple million models. That compares with about 339,000 autos for the 2 manufacturers in 2023.
Underneath the deal, Zeekr will buy a 30% stake from one other group agency, Volvo (OTC:) Automobiles, and a 20% stake from Geely Holding, the group mentioned in a press release.
Shares in Volvo Automobiles have been up 3.5% in early commerce, among the many largest 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 important listed arm, will proceed to personal the remaining.
The deal values Lynk, a Chinese language-Swedish model, at round 18 billion yuan ($2.5 billion). It needs to be accomplished by June subsequent yr, an individual with direct data of the plans mentioned.
Particulars of the transaction have been first reported by Reuters.
Inside the group, Zeekr is anticipated to steer innovation for electrical and related autos, sharing that analysis with different manufacturers together with Lynk and Polestar (NASDAQ:), mentioned the particular person and a one other supply with direct data of the plans.
Lynk’s product workforce 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 mentioned.
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 Automobiles.
Lynk, which was launched in 2016 and at present has 9 fashions, bought roughly 195,600 autos within the first 9 months of the yr, a 40% enhance over the identical interval a yr in the past.
By comparability, Zeekr, a three-year-old model, bought virtually 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 virtually 40% since then, giving it a market worth of $7.3 billion.
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