Zeekr set to acquire majority stake in Lynk & Co

Premium electric vehicle manufacturer Zeekr is poised to take majority control of Lynk & Co, marking the first major restructuring move within the Geely Holding Group's planned overhaul. The deal, expected to be completed by June 2025, values the Chinese-Swedish brand at approximately 18 billion yuan (USD 2.5 billion), according to sources familiar with the matter.

The complex transaction involves Zeekr acquiring Volvo Cars' entire 30% stake in Lynk & Co, along with a 20% stake from Geely Holding. The EV maker will further increase its ownership to 51% through a capital injection, while Geely Automobile Holdings, the group's primary listed entity, will retain the remaining shares.

This strategic reorganisation comes in the wake of Geely Chairman Eric Li's September announcement regarding the need for comprehensive integration across the group's portfolio of twelve automotive brands. Li emphasised the importance of improving operational efficiency, reducing costs, and establishing clear market positioning for each brand to prevent internal competition.

Industry analysts have previously noted the considerable overlap between Zeekr and Lynk & Co's product offerings and pricing strategies, which has led to market cannibalization. The consolidation appears designed to address these concerns while strengthening the group's position in the competitive electric vehicle market.

The integration process is already underway, with Lynk & Co's product team beginning to report to Zeekr CEO Andy An last week. Discussions are ongoing about expanding the sharing of technologies and components between the two automakers. This alignment is evident in Lynk's latest electric vehicle models, the Z10 and Z20, which utilise the same architectural platform as Zeekr's vehicles, though Lynk's gasoline and hybrid models continue to use platforms developed jointly by Geely and Volvo Cars.

Within the reorganised structure, Zeekr is expected to spearhead innovation in electric and connected vehicles, sharing its research and development capabilities with other group brands, including Lynk and Polestar. This consolidation of technological development under Zeekr's leadership suggests a more streamlined approach to the group's electric vehicle strategy.

The performance metrics of both brands demonstrate their growing market presence. Lynk & Co, established in 2016, reported sales of approximately 195,600 vehicles in the first nine months of 2023, representing a 40% year-over-year increase. Meanwhile, the younger Zeekr brand, despite being only three years old, has shown remarkable growth with sales of nearly 143,000 vehicles across its six models during the same period, marking an 81% increase.

Zeekr's strong market performance is reflected in its successful New York stock market listing in May, where its shares have appreciated by almost 40%, resulting in a current market capitalization of USD 7.3 billion. This robust valuation positions the company well for its expanded role within the Geely Group.

While Geely Holding has declined to comment on the specifics of the transaction, this restructuring represents a significant shift in the group's strategy from its previous focus on acquisitions to a more integrated and streamlined operational model. The move signals Geely's commitment to optimising its complex portfolio of automotive brands in response to the evolving global automotive landscape, particularly in the electric vehicle sector.