Zeekr Takes Control of Lynk & Co

HONG KONG/SHANGHAI (Reuters) – Chinese premium electric vehicle maker Zeekr will take control of Lynk & Co, a sister brand owned by Geely and Volvo Cars, according to two sources with direct knowledge of the plans.

This is the first significant restructuring move in a comprehensive overhaul planned by Geely Holding, the parent company of all three automakers, as well as nine other car or truck brands. The company is shifting away from acquisitions towards streamlining operations and cutting costs.

Under the deal, Zeekr will acquire Volvo Cars' entire 30% stake in Lynk and a 20% stake from Geely Holding. Sources indicated that Zeekr will increase its stake to 51% through a capital injection, while Geely Automobile Holdings, the group's primary listed arm, will retain ownership of the remaining shares.

The valuation for the Chinese-Swedish brand is around 18 billion yuan ($2.5 billion) and the deal is expected to be finalized by June next year.

Details of the planned transaction have not been previously reported. Geely Holding declined to comment.

Geely Chairman Eric Li announced the group overhaul plans in September, emphasizing the necessity for deep integration to enhance efficiency and reduce costs. He stated that all brands should clarify their model positioning to avoid overlap.

Analysts have noted that Zeekr and Lynk overlap in products and pricing, impacting each other's sales.

Within the group, Zeekr is anticipated to spearhead innovation for electric and connected vehicles, collaborating on research with other brands, including Lynk and Polestar.

Lynk's product team began reporting to Zeekr CEO Andy An last week, with discussions underway about leveraging shared technologies and components.

Lynk's latest EV models, the Z10 and Z20, share the same architecture as Zeekr's cars, while gasoline and hybrid models are based on different platforms developed by Geely and Volvo Cars.

Launched in 2016, Lynk currently offers nine models and sold approximately 195,600 vehicles in the first nine months of the year, marking a 40% increase from the previous year. In comparison, Zeekr, established three years ago, sold nearly 143,000 cars in the same timeframe, an 81% rise.

Zeekr went public in New York in May, with its shares climbing nearly 40% since then, resulting in a market valuation of $7.3 billion.

($1 = 7.2425 Chinese yuan)