Volvo Cars and owner Geely look at synergies

COPENHAGEN, Denmark – Swedish automaker Volvo Cars and its owner Chinese automaker Geely Holding said Monday they are considering combining their businesses to “accelerate financial and technological synergies between the two companies.”

A combined company would preserve the distinct identity of each of the brands Volvo, Geely, Lynk & Co and Polestar, Volvo’s electric brand.

The proposal comes at a time when carmakers face huge investments to develop electric cars to meet tougher CO2 emissions limits, particularly in China and Europe, as well as technological innovation like driverless vehicles

In a joint statement, the two companies said that a combined group “would have the scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry.”

It would be listed on the Hong Kong Stock Exchange “and with the intention to subsequently list in Stockholm as well.”

The two will create a joint working group to prepare a proposal for their respective boards. A deal would be subject to the approval by the boards and and shareholders of Geely and Volvo Cars, as well as by regulators.

Volvo Cars, based in Sweden, but has been owned by Geely since 2010.