China’s Geely Clinches Merger Deal With US-Listed EV Unit Zeekr
Zhang Yushuo
DATE:  9 hours ago
/ SOURCE:  Yicai
China’s Geely Clinches Merger Deal With US-Listed EV Unit Zeekr China’s Geely Clinches Merger Deal With US-Listed EV Unit Zeekr

(Yicai) July 16 -- Geely Automobile Holdings and Zeekr Intelligent Technology Holding, its New York-listed premium electric vehicle unit, announced that they have entered into a merger agreement, furthering the Chinese car giant’s strategy of consolidating its brands and resources.

Geely will buy all the shares of Zeekr that it does not already own for USD2.687 each, or USD26.87 per American Depository Share, the pair said in separate statements yesterday.

That represents a premium of almost 19 percent over the closing price on May 6, the day before Geely announced a plan to take the unit private. Geely’s initial offer was USD2.566 per share, or USD25.66 per ADS, which was a 13.6 percent premium over Zeekr’s May 6 closing price.

Taking private Zeekr, which only went public in May last year, will boost Geely’s efficiency, innovation, and profitability, creating more value for all shareholders, the Hangzhou-based company said.  

The move is a key plank of the Taizhou Declaration, a strategy set out by Geely Chairman Li Shufu last September to create a unified platform by integrating in‑house resources, eliminating internal competition and redundant investment, and enhancing overall efficiency. Since then, Geely has merged several sub-brands, including Lynk & Co into Zeekr and Geome into Galaxy.

“In line with the spirit of the Taizhou Declaration, the continued integration of Geely's automotive business gives rise to greater technological synergies, improves innovation capabilities, and increases profitability for all its holdings,” Li said. “We will continue to maintain close communication and cooperation with American and global capital markets.”

Geely Auto’s shares [HKG: 0175] ended little changed at HKD18.26 (USD2.33) apiece in Hong Kong today, after earlier gaining by as much as 2.9 percent. Zeekr [NYSE: ZK] rose 2.4 percent to finish at USD28.48 yesterday.

The Zeekr deal, which is expected to be completed in the fourth quarter of this year, still needs to be approved by at least two-thirds of Zeekr's shareholders and by no less than half of Geely's independent shareholders. Geely and its units, which own about 65.2 percent of Zeekr's shares, have already pledged their votes in favor of the merger.

Zeekr's folding into Geely Auto, along with Lynk & Co's merger into Zeekr, has signaled that the integration of Geely's internal resources has entered a new stage that will improve the overall competitiveness of the group and enhance its ability to adapt to the fast-changing market environment, according to industry analysts.

Once all of the mergers are completed, Geely's fleet will cover every market segment, from internal combustion engine vehicles to pure electric and plug-in hybrid electric vehicles, and all price ranges, from economy to mid-to-high-end and luxury models.

Editor: Futura Costaglione

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Keywords:   Geely,Zeekr,Merger,Automotive Industry,Strategic Integration,Lynk & Co