Revised Volvo pact better serves investors, Geely says
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Geely Automobile CEO Gui Shengyue talked up the decision not to pursue a full merger with Volvo Cars, saying on an investor call that shareholders’ interests are better served if the two companies remain as standalone entities.
The difficulty of coming up with a fair valuation for Volvo acceptable to both Geely investors and Volvo was one of the main reasons that led to the change of plan, Gui said on Thursday.
Geely investors wanted a valuation on the lower side and even if Geely Chairman Li Shufu had agreed to that, Sweden’s government and Volvo’s union would have been against it because of the potential damage it could cause to Volvo’s brand, Gui said.
The two automakers have different cultures, Geely CEO Gui Shengyuey said, noting also that the world has changed with the coronavirus pandemic and the relationship between the East and West has altered too.
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