By Connor Hart
American depositary receipts of Geely Automobile subsidiary Zeekr Intelligent Technology fell after the Chinese electric-vehicle manufacturer said it plans to acquire a 50% stake in Lynk & Co from its parent and Volvo Car.
ADRs tumbled 26%, to $21.55, in afternoon trading Thursday. The company -- which planned to sell 21 million ADRs at $21 apiece during its initial public offering in May -- began trading at $26 before days later hitting a high of $32.24.
The acquisition seeks to boost Zeekr's resource utilization and enhance its competitiveness in China's electric-vehicle space. Under its terms, Volvo Car agreed to sell its 30% stake in Lynk & Co to Zeekr for around $748 million, while Geely agreed to sell a 20% stake for 3.6 billion yuan, equivalent to $498.3 million, Geely said in a Hong Kong stock-exchange filing on Thursday.
Zeekr also plans to inject 367.3 million yuan of capital into Lynk & Co, according to Geely.
The deal, which is expected to close during the first quarter of 2025, comes as Geely has been working on maximizing its advantages to become more competitive in the EV market, Dow Jones Newswires reported, citing analysts.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
November 14, 2024 14:05 ET (19:05 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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