China's Geely mulls merger with Volvo Cars
Geely Automobile and Volvo Cars are considering a multi-billion dollar merger, it was confirmed on Monday.
Should the deal go ahead, it would create a global car manufacturer listed in both Hong Kong and Stockholm, Sweden.
Geely’s parent group, which is controlled by its billionaire chairman Li Shufu, acquired Volvo Cars from Ford Motor Co in 2010.
In a statement, Geely said it was in preliminary discussions with the management of Volvo Cars regarding "a possible restructuring of the businesses of the two companies into a strong global group that could realise synergies in cost structure and new technology development to face the challenges in the future".
Geely added that it would preserve the two companies’ marques, including Geely, Volvo, Lynk & Co and Polestar, and would carry out the dual listing to enable access to capital markets.
It conceded, however, that there were currently "no concrete timetable or detailed plans" for the proposed deal.
Previous discussions to float Volvo Cars in Stockholm, with a valuation of around $30bn, were shelved two years ago.
As well as Geely and Volvo, Li has a number of other investments in the car industry including a 9.7% stake in Germany’s Daimler and a majority holding in Lotus, the British sports car brand.
The global car industry is looking to adapt to fundamental shifts in the market, including far tougher emissions standards, the decline in popularity of petrol and diesel cars and the need to invest in next generation electric cars.