Geely Holding chairman Li Shufu said on Wednesday the Chinese automaker would “maintain close communication and collaboration with the US and international capital markets,” as it goes ahead with its plan to take its electric vehicle unit Zeekr private out of the New York stock market (our translation). That’s according to a statement published on Chinese social media platform WeChat.
Geely Auto, the group’s main listed arm, has offered $25.66 per American depositary share in Zeekr in cash or through the sale of new shares. That represents a 13.6% premium on top of the stock’s value at the close of trading on Tuesday, the company said in a statement to the Hong Kong stock exchange.
Zeekr shares jumped 11.5% to $25.2 on the news, giving it a market capitalization of $6.4 billion as of Wednesday, about the same amount the proposed deal would value it at. With Geely already holding 65.7% of Zeekr, it needs to pay approximately $2.2 billion in cash for the remaining 34.3% share, according to calculations by Bernstein analysts.
The unexpected move comes just a year after Zeekr’s New York debut last May, where is raised $441 million in the biggest initial public offering in three years from a Chinese company, Reuters reported.
Geely, China’s third biggest auto firm by sales volume last year, has been restructuring its businesses, eliminating overlapping roles and reducing staff costs with a goal of ensuring sustainable long-term growth following the release of its so-called “Taizhou declaration” plan in September. Geely Holding operates a diverse, broad array of vehicle brands including Zeekr, Lynk & Co, and Galaxy.
The Zeekr brand, launched by Geely in early 2021, delivered nearly 474,000 all-electrics in four years as of April, although its monthly sales this year have remained flat at less than 15,000 units. The premium EV brand completed a merger with Lynk & Co in February, holding a 51% majority stake in its sister brand and creating another new group in addition to Geely Auto under Geely Holding.
