Chinese automaker Geely, the second-largest shareholder in Volvo AB, has confirmed that it has lowered its stake in the company. Over the past few months, Geely has redeemed bondholders with shares of the Swedish truckmaker, reducing its stake from 8.2% to 6.8%. However, Geely emphasized that this move does not impact its strategic long-term investment in Volvo.
Geely's parent company, Zhejiang Geely Holding Group, handed over more than 7 billion kronor ($685 million) worth of stock in the redemption process. Despite the reduction in shares, Geely stated that its voting strength remains largely unchanged. The company's spokesperson, Stefan Lundin, clarified that the change in ownership of B-shares was related to the concluded bond program.
Last year, Geely sold off its 6.3% stake in Volvo's competitor, Daimler Truck Holding AG, which amounted to approximately €1.5 billion ($1.6 billion). This move fueled speculations that Geely might increase its influence at Volvo after eliminating the conflict of interest of owning shares in the world's two largest truck manufacturers.
Geely had previously indicated that it could reduce its stake in Volvo due to the repayment of bonds. The Chinese automaker holds a range of automotive interests in Europe and divested a $350 million stake in electric vehicle manufacturer Volvo Car in November. In addition to Volvo, Geely also holds stakes in Lotus and Aston Martin.
While the reduction in stake indicates a shift in Geely's ownership in Volvo, the company's assertion of a strategic long-term investment suggests that it remains committed to the Swedish truckmaker. Geely's decision to redeem bondholders with shares highlights its confidence in Volvo's potential and aligns with its focus on consolidating its automotive portfolio. As the automotive industry undergoes rapid transformation, it will be interesting to observe Geely's future moves and its impact on Volvo's operations and growth.