Geely announces $1.3 billion stake sale of Volvo Truck shares

China’s Zhejiang Geely Holding Group is selling all its Class B shares in Volvo AB, a truck manufacturer. These shares are valued at 14.46 billion Swedish krona, which equates to approximately $1.32 billion in US dollars. Geely says this move is part of its long-term strategy. Even after the sale of these shares, Geely will still be Volvo’s second largest investor, with 88.5 million A shares.

According to Geely, adjusting its strategy and including AB Volvo in its car production and investment plans is a way to manage risks and diversify investments. The company is selling 49.5 million shares through BofA Securities, Goldman Sachs Bank Europe and Barclays. The price per share is set at SEK 285.9, which is slightly lower than the closing price.

Geely announces $1.3 billion stake sale of Volvo Truck shares
Geely Volvo truck (credits: Volvo)

Volvo recently reported its first-quarter operating profit, which was better than what analysts expected. Even though orders fell, Volvo managed to make more money by raising prices. The company is making fewer trucks as demand returns to normal levels after the pandemic. Shares are up 12% this year.

Geely has reduced its shareholding in Volvo since January. They also sold part of their shares in Volvo Car AB last November. Earlier this year, Geely had to help Polestar, an electric car company it co-owns with Volvo Car, as it faced financial problems.