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Chinese Auto Giant takes Big Stake in Volvo Group (Volvo Trucks, Volvo Construction Equipment
Original source: Heavy Vehicles

Geely, which already owns carmaker Volvo Cars, will now also be the biggest owner in Volvo.

Chinese car group Geely will pay about €3.25bn ($3.8bn) to Cevian Capital, Sweden’s largest activist investment fund, for a stake in Volvo Group with 8.2 per cent of the capital and 15.6 per cent of the vote.

The Chinese company, which already owns carmaker Volvo Cars, will now become the biggest owner in Volvo, Sweden's largest listed company which manufactures trucks, construction equipment and and boat engines.

Helped by Volvo's share price surge of late – 50 percent in the past year – Gardell and his Cevian Capital will profit upwards of 20 billion SEK ($2,4 billion).

“We have been owners in Volvo for eleven years, and now we are handing the company over to a good owner that thinks long-term, is industrial and competent,” Christell Gardell, partner at Cevian Capital, said to Swedish business daily Dagens Industri (Di).

Geely and Cevian didn’t disclose the exact sale price, but it’s very likely that Geely has paid a neat premium.

Cevian Capital will use the proceeds to invest in new companies and to grow existing positions, Gardell said in a phone interview with Bloomberg News.

"We are currently investing in a new company. We like good companies [that can be bought cheaply], and where we can add value through change,” Gardell, who was recently named by Fortune as Europe’s best activist investor, said.


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