Geely Sold Off Billions Worth of Volvo Truck Shares

Sweden-based truck maker Volvo AB’s Class B shares, sold off by China’s Zhejiang Geely Holding Group.

The shares worth SEK 14.46 Billion (USD 1.32 Billion) saw a drop as much as 5.9%, at the close of trading in Stockholm last Friday.

Maintaining its stake as Volvo’s second-largest investor with 88.5 Million A shares, this divestment is in accordance with the company’s long-term strategy.

According to a term sheet, Geely is offering the 49.5 Million shares at SEK 285.9 a share, which is a 2.2% discount from its closing price. These were sold through BofA Securities, Goldman Sachs Bank Europe, and Barclays.

Geely said, “Geely Holding’s strategic adjustment and inclusion of AB Volvo in its automotive manufacturing and investment portfolio is part of the group’s risk management and diversified investment strategy.”

Notably, Volvo’s first-quarter operating profit beats market analysts’ expectations, as the truck maker offsets declining orders by charging higher prices.

It has been reducing production as demand returns to more typical levels following a post-pandemic recovery period. Its shares have increased 12% this year.

That said, Geely trimmed its Volvo stake in January, and also sold some of its holding in Volvo Car AB in November. 

This is due to the China-based company’s bail-out of Polestar, the struggling EV manufacturer it started along with Volvo Car.