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Geely Plans to Sell $1.32 Billion Worth of Volvo Truck Shares

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China’s Zhejiang Geely Holding Group is making headlines as it plans to sell its entire Class B shares in truckmaker Volvo AB. The shares are valued at around 14.46 billion Swedish krona ($1.3 billion). The divestment is part of Geely’s long-term strategy, although the company will still hold the position of Volvo’s second-largest investor with 88.5 million A shares.

The decision to sell the Class B shares is seen as a strategic adjustment by Geely, as it aims to manage risks and diversify its investment portfolio. The shares, totaling 49.5 million, will be offered through BofA Securities, Goldman Sachs Bank Europe, and Barclays at a price of SEK285.9 per share, representing a more than 2% discount from the closing price. Following the announcement, Geely’s listed arm in Hong Kong experienced a more than 3% decline in share value.

Volvo, on the other hand, reported better-than-expected first-quarter operating profit fueled by increased prices amid decreasing orders. The company has been adjusting production levels as demand returns to pre-pandemic norms. Geely had previously reduced its stake in Volvo in January and sold a portion of its holding in Volvo Car AB in November. Additionally, the Chinese conglomerate faced challenges earlier this year when it had to assist the struggling electric-vehicle manufacturer Polestar, which it co-founded with Volvo Car.

It’s clear that Geely’s move to sell its Class B shares in Volvo AB is a strategic decision in line with its long-term goals and risk management strategy. The automotive industry will be closely monitoring the impact of this divestment on both companies moving forward.

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