On November 14, Caijing News (Reporter Liu Yang) reported a major transformation of Geely autos' business territory with the curtain rising on the long-expected merger.

On November 14, Geely autos announced a strategic integration trade agreement with Zhejiang Zeekr and LYNK & CO. According to the agreement, Geely Holding will sell 20% equity of LYNK & CO for 3.6 billion yuan; Volvo Group will sell 30% equity of LYNK & CO for 5.4 billion yuan. After the trade, LYNK & CO will be held 50% by both Geely and Zhejiang Zeekr. Additionally, Zhejiang Zeekr will subscribe to the increased registered capital of LYNK & CO, amounting to 0.367 billion yuan. The equity structure of LYNK & CO will change to Geely Holding owning 49% and Zhejiang Zeekr owning 51%. This move will make LYNK & CO an indirect non-wholly owned subsidiary of Zhejiang Zeekr and Geely Holding, with its financial performance consolidated into the comprehensive financial statements of the two companies.

On the same day, Geely Holding announced the transfer of 11.3% stake in Zeekr Smart Technology to Geely autos for 0.806 billion US dollars (approximately 5.8 billion yuan). After the trade, Geely autos' stake in Zeekr will increase to around 62.8%.

"The injection of high-quality core assets into the listed company this time is a significant move for Geely Holding Group to implement the 'Taizhou Declaration' strategic framework, focusing on the automotive core business, expanding and strengthening Geely autos, and creating greater value for customers and investors." At the earnings conference after releasing the third-quarter report for 2024 on that day, Gui Shengyue, CEO of Geely autos Holding, discussed the considerations behind the integration of Geely autos, Zeekr, and LYNK & CO. "In the current fiercely competitive Chinese auto market, more efficient resource sharing is needed to drive cost reduction through economies of scale, thus enhancing competitiveness. In the current market competition environment, this is very important for each company."

Gui Shengyue admitted that LYNK & CO incurred losses due to its European business, leading to its current undervaluation. "I believe this valuation will be the historical low point for LYNK & CO, and its valuation will continue to rise in the future." In Gui Shengyue's view, this is a very suitable time for Zhejiang Zeekr, and due to the improvement in Zeekr's performance, it is also the best time for Geely autos. "At the level of LYNK & CO shareholders, even though Volvo is exiting, it will still provide strong support and assistance for LYNK & CO's development overseas, especially in Europe."

Prior to the aforementioned over 15 billion yuan major integration announcement, Zeekr released its third-quarter report indicating a total revenue of 18.36 billion yuan, a 31% year-on-year growth; total vehicle revenue exceeded 14.4 billion yuan, a 42% year-on-year growth and 7% quarter-on-quarter growth; the vehicle gross profit margin reached 15.7%. In the first three quarters of this year, total revenue of the company increased by over 50% to 53.1 billion yuan, surpassing the full-year 2023 performance. By the end of October, Zeekr had delivered over 0.36 million vehicles.

On the same day, Geely autos announced that in the third quarter, the company achieved revenue of 60.4 billion yuan, a 20.5% year-on-year growth, reaching a historical high in quarterly revenue; from January to September, Geely autos' revenue reached 167.7 billion yuan, a 36% year-on-year growth. Benefiting from economies of scale and optimization of product structure, in the third quarter, Geely autos' attributable net profit to shareholders reached 2.76 billion yuan, a 116% year-on-year growth. From January to September, the company's attributable net profit to shareholders reached 13.05 billion yuan, a 358% year-on-year growth.

In September this year, Li Shufu, Chairman of Geely Holding Group, released the 'Taizhou Declaration' in Taizhou, explicitly announcing a new phase of strategic transformation by focusing on the automotive core business and enhancing competitiveness through 'strategic focus, integration, synergy, stability, and talent'. In the 'strategic integration' section, Li Shufu pointed out that 'Geely will re-evaluate the retention of brands.'

On October 9th, Geely Auto CEO, Gan Jiaye, announced that Geometry has formally merged into the Silver Galaxy brand; on October 21, Geely Auto announced the acquisition of Ningbo Passenger Vehicle.

While Geely Auto, zeekr, and Lynk & Co are undergoing a mega integration exceeding billions, there are reports in the market that the previously independently developed 'Geely Group' new energy pickup brand, the radar auto, as well as LEVC (London Electric Vehicle Company), will all be incorporated into Geely Auto Group. In addition, the R&D teams will be integrated into the Geely Central Research Institute to achieve internal resource sharing, reduce cost inputs, and operate under a light-asset model.

From the perspective of Geely's management, the integration will bring the following benefits: first, eliminate industry competition; second, complementary brand positioning, helping to enhance the product portfolio; third, unified product architecture, achieving complementary R&D capabilities; fourth, complementary sales networks, expanding the user reach; fifth, economies of scale, continuously driving cost reduction and efficiency improvement.

"In terms of branding, (zeekr, Lynk & Co) will maintain a dual-brand strategy after the merger, relatively independently in the market—zeekr focusing on luxury technology, targeting the luxury car market; Lynk & Co positioning as a global new energy high-end, focusing on the mid-to-high-end market, achieving maximum market coverage." zeekr Intelligent Technology CEO An Conghui revealed that in terms of products, the two brands will undergo comprehensive brand sorting and planning to avoid product conflicts in the market. 'zeekr focuses on medium and large-sized vehicles, while Lynk & Co focuses on small and medium-sized vehicles. In terms of energy forms, Lynk & Co focuses on pure electric small cars, hybrid mid-size cars, while zeekr focuses on pure electric mid-size cars and hybrid large cars.'

An industry insider familiar with Geely informed reporters that in the passenger vehicle sector, Geely Holding's future investments will own two major automotive groups: Geely and zeekr. 'According to the plan, by the end of 2026, this new automotive group will aim for an annual production and sales target of one million vehicles.'