HONG KONG (Reuters) - Shares in Geely Automobile Holdings Ltd 0175.HK rose as much as 5 percent to a two-month high on Monday, on expectations that the Chinese automaker will benefit from its parent's plan to buy Ford Motor's F.N Volvo car business.
Zhejiang Geely Holding Group, China’s biggest private car maker, signed an agreement on Sunday to buy the Sweden-based premium brand from Ford for $1.8 billion.
Analysts said the listed company was likely to benefit from a technology transfer and a brand upgrade after the Volvo deal is completed in the third quarter.
“There is no immediate financial impact, but it will help upgrade the branding of Geely cars,” said Rebecca Tang, an analyst at CIMB.
Geely Automobile said in a statement on Monday that the parent company will sell all or part of the Volvo business to the listed company if approved by independent non-executive directors of Geely Automobile.
But analysts said the listed company will probably wait at least until Volvo turns around before it will seriously consider buying the asset.
Geely shares rose to HK$4.3, lifting the company's market capitalization to about $4 billion, before settling to HK$4.18 at 0247 GMT. The stock outperformed a 0.6 percent gain on the broader market .HSI.
Reporting by Alison Leung; Editing by Don Durfee and Ken Wills
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