HONG KONG/SHANGHAI (Reuters) -Chinese premium electric vehicle maker Zeekr will take control of Lynk & Co, a sister brand owned by Geely and Volvo (OTC:) Cars, two sources with direct knowledge of the plans said.
It’s the first big restructuring move in a sweeping overhaul planned by Geely Holding, the parent company of all three automakers as well as nine other car or truck brands, as it shifts away from acquisitions to streamlining its operations and cutting costs.
Under the deal, Zeekr will purchase Volvo Cars’ entire 30% stake in Lynk and a 20% stake from Geely Holding, said the sources who declined to be identified as the discussions were private.
Zeekr will then to nudge its stake up to 51% with a capital injection while Geely Automobile Holdings (OTC:), the group’s main listed arm, will continue to own the rest, one of the sources said.
The deal values the Chinese-Swedish brand at around 18 billion yuan ($2.5 billion) and should be completed by June next year, said the person.
Details of the planned transaction have not previously been reported.
Geely Holding declined to comment.
Geely Chairman Eric Li announced plans for the group overhaul in September, telling staff that deep integration was needed to improve efficiency and reduce costs. All brands in the group should clarify how its models are positioned so that overlap can be avoided, he added.
Zeekr and Lynk have some overlap with similar products and pricing, cannabilising each other’s sales, analysts have said.
Within the group, Zeekr is expected to lead innovation for electric and connected vehicles, sharing that research with other brands including Lynk and Polestar (NASDAQ:), said one of the sources and a third person with direct knowledge of integration.
Lynk’s product team started to report to Zeekr CEO Andy An last week and there have been discussions about leveraging more technologies and components that the two automakers share, the third person said.
Lynk’s two latest EV models, the Z10 and Z20, share the same architecture used by Zeekr’s cars while its gasoline and hybrid models use different platforms developed by Geely and Volvo Cars.
Lynk, which was launched in 2016 and currently has nine models, sold roughly 195,600 vehicles in the first nine months of the year, a 40% increase over the same period a year ago.
By comparison, Zeekr, a three-year old brand, sold almost 143,000 cars in the first nine months of 2024 with six models, up 81%.
Zeekr listed in New York in May and has seen its shares climb almost 40% since then, giving it a market value of $7.3 billion.
($1 = 7.2425 )
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