Volvo CEO says negotiations to combine with Geely to resume in first quarter

FILE PHOTO: CEO Hakan Samuelsson is photographed in Volvo Cars factory that is to restart the production after a standstill due to the coronavirus disease (COVID-19) situation, in Torslanda, Gothenburg, Sweden April 17,2020. Adam Ihse/TT News Agency/via REUTERS/File Photo

FRANKFURT (Reuters) - Talks on a merger or alliance between Sweden’s Volvo Cars and China’s Geely are likely to resume next year, Volvo Chief Executive Hakan Samuelsson said on Wednesday.

Efforts by Geely to seek a listing on Shanghai’s New Star Market currently prohibit the Chinese carmaker from making changes to its capital structure, delaying the talks into 2021, Samuelsson told the Financial Times Future of the Car Summit.

“Quarter one is more realistic next year. We have said we are looking at a combination and it could be done in different ways. Platform sharing and so on,” Samuelsson said.

Any effort to combine would be done with the aim of preserving the identities of each company and Volvo wants to continue to be able to tap markets to raise funds for investments in low-emission vehicles.

“Volvo is of course very proud..and Geely is very proud of their brand and they of course also don’t want to be part of a more European constellation. It is an opportunity to form some sort of an alliance,” Samuelsson said.

Geely has access to a lot of very efficient suppliers in China and there is potential to do more together with them, Samuelsson said. “Let’s see what is the best way forward.”

Separately, Volvo said it has sold environmental credits to Ford Europe, as both companies face stringent fleet emissions rules this year.

“We will use the money to accelerate electrification,” Samuelsson said about the sale.

Reporting by Edward Taylor; editing by Emelia Sithole-Matarise