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Geely is planning to take its electric vehicle unit Zeekr private, only a year after its New York listing as the Chinese auto conglomerate blamed pressures from an “increasingly complex economic environment”.
The delisting comes as the group closes out a decades-long expansion period and focuses on internal consolidation of its brands amid rising competition in its home market.
Geely Auto, a Hong Kong-listed unit of privately held Geely Holding, plans to acquire all issued shares of Zeekr at $25.66 a share, 14 per cent higher than the stock’s closing price on Tuesday, the company said in an exchange filing on Tuesday. The bid will value Zeekr at about $6.4bn.
Last May, Zeekr raised $441mn from the sale of 21mn American Depository Shares at $21 per share in a several times oversubscribed US IPO.
A record number of Chinese companies went public on US stock exchanges last year even as they faced increasing trade tensions between the world’s two largest economies.
The China Securities Regulatory Commission intends to impose “tighter control” this year over US IPOs of Chinese companies with small capitalisation and weak fundamentals, viewing them as prone to market manipulation, according to people close to the organisation.
Pony.ai, a Chinese robotaxi operator, said in a recent interview with the Financial Times that it was considering a secondary listing in Hong Kong less than six months after its US IPO amid delisting concerns.
Geely Auto currently holds approximately 65.7 per cent of Zeekr’s shares, and upon completion of the transaction, Zeekr will be fully merged with Geely Auto, according to the company.
The acquisition aims to “eliminate redundant investments” and “reduce costs”, Geely Holding said in a statement on Wednesday. “We will assess the situation carefully . . . and continue to drive the integration of our automotive business, returning to a unified Geely,” chair Li Shufu said.
The billionaire behind one of the world’s largest auto empires — owner of Volvo Cars, Lotus and Polestar — has been actively unloading his global assets and streamlining his core business since last year.
In September, Li told a management meeting that the group had entered a new phase defined by “consolidation” and “prudence”, with the goal of navigating “a highly competitive market”. This announcement, known as the “Taizhou declaration” — a reference to the location of Geely’s first factory — has set the tone for the company’s strategic pivot.
Following the shift, Geely merged two of its electric vehicle sub-brands — Zeekr and Lynk & Co — and shut down Ji Yue, its joint EV brand with Baidu. Earlier this year, Geely also sold its stakes in Denmark’s Saxo Bank and truckmaker Volvo AB.
Despite a voluntary delisting of Zeekr, Geely emphasised that the group would “maintain close communication and co-operation” with the US and international capital markets.
Shares of a cohort of Geely’s car businesses have underperformed since they listed, with Volvo, Lotus, Polestar and ECARX down more than 70 per cent since their IPOs.
On Wednesday, Volvo Cars said it planned to cut 5 per cent of its 2,500 workforce at its factory in South Carolina as part of a $1.9bn cost-cutting programme launched after a 59 per cent fall in first-quarter operating profits.
