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Geely became an investor in a luxury car brand from the UK
The Chinese automaker Zhejiang Geely Holding bought a stake in the British company Aston Martin. The latter is a manufacturer of luxury cars. The amount of the deal was approximately 66 million pounds and was another step in expanding the business of Chinese billionaire Li Shufu in the European automotive market.
Geely bought 7.6% of the British brand. Aston Martin said it was able to raise 654 million pounds from various investors in addition to this deal. It plans to use the funds to strengthen its business.
Representatives of Geely say that the deal with the British manufacturer will have positive results for both partners. For its part, the Chinese automaker plans to cooperate with Aston Martin not only in terms of investment. Geely intends to share its technological solutions with the British manufacturer.
The investment by the Chinese automaker in Aston Martin is interesting from the point of view of the failure of negotiations between the companies in the past. In 2020, Geely wanted to buy a part of the brand, but it did not accept the offer. Then the talk was about 1.3 billion pounds, but Aston Martin refused, arguing that it is unattractive to shareholders. In view of the fact that the Chinese manufacturer did buy a part of the shares of the British company, we can judge that the past strategy of the brand has not brought the desired result.
After it became known about the deal, the value of Aston Martin shares rose by 6.6%. However, after a few days, the price dropped.
In 2010, Geely bought Swedish manufacturer Volvo, which at the time belonged to the U.S. automaker Ford. The deal amounted to $1.3 billion and was the first for a Chinese business in Europe. In 2018, it bought a part of Daimler’s shares from Germany, and a year later the parties created a joint project Smart Automobile, which produces electric cars and hybrids.
Geely is considered one of China’s largest car manufacturers, which includes a large number of local and foreign brands. In addition, the business structure includes companies from other sectors, such as Meizu, which produces smartphones. Geely was founded in 1986 by businessman Li Shufu, its head office is located in Hong Kong. Initially, the firm was engaged in the production of refrigeration equipment and parts for him. However, in 1989, a new law came into effect in China, according to which the company that releases this type of product must have a license. Then it was decided to retrain the production of building materials. In 1992, the company bought a license for the production of motorcycles and scooters, and with it began the history of the automotive business.