The company that owns Volvo’s car business is now planting its flag on the separate truck company that also bears the Volvo name. Geely Holding will purchase an 8.2-percent stake in AB Volvo in a deal said to be worth $3.3 billion, reports Reuters.
Geely will acquire all the shares previously held by Cevian Capital. In doing so, it has become the largest shareholder by capital in the heavy truck company.
The deal will give AB Volvo access to Geely’s market knowledge, resources, and technologies. These technologies are benefiting Volvo Cars, which Geely purchased in 2010. As one example, Geely set up a company to create platforms and technologies for its automotive brands, including the CMA hardware for small vehicles.
“The agreement will not only give AB Volvo a new large and committed shareholder, but one with significant expertise in strategically important areas for future value-creation, such as electrification, autonomous driving, connectivity, and the Chinese market,” Cevian Capital co-founder Christer Gardell said in a statement.
In a statement, Geely Holding Chairman Li Shufu said, “Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo.”
Despite Geely’s new involvement with AB Volvo, the truck company will remain separate from Volvo Cars, which split off from AB Volvo in 1999. AB Volvo offers a range of commercial trucks, construction trucks, and buses and owns a 45-percent stake in Dongfeng Commercial Vehicles, one of China’s largest truck manufacturers.