Chinese automaker Geely Automobile has announced a $2.2 billion offer to privatize its electric vehicle (EV) unit Zeekr, just one year after its debut on the U.S. stock market. The move is aimed at consolidating operations amid rising competition in the global auto industry.
Geely plans to pay $25.66 per American Depositary Share (ADS) of Zeekr. This offer represents a 13.6% premium over Zeekr’s closing stock price on Tuesday. The bid values Zeekr at $6.52 billion. Geely already owns about 65.7% of the company and would need to acquire the remaining 34.3% to fully take it private.
Following the announcement, Zeekr’s shares surged 11.11% to $25.10 in premarket U.S. trading.
Once the deal is complete, Zeekr will be fully merged into Geely Auto (HK:0175), the company said.
“In today’s highly competitive and complex market, we will push forward with the integration of our automotive business,” said Geely chairman Li Shufu in a post on WeChat. He referred to the “Taizhou Declaration,” a strategic shift announced last year focused on streamlining operations and reducing internal competition.
Geely Holding, the parent company of Geely Auto, Zeekr, and Volvo, has moved away from its earlier strategy of aggressive acquisitions. Instead, it is now focused on improving efficiency and cutting costs amid a price war in China’s car market.
As part of its restructuring, Geely has split its operations into two main divisions: Geely Auto, targeting the mass market, and Zeekr Group, which focuses on premium vehicles. In March, it also combined three separate units developing digital cockpit systems into one team of nearly 2,000 engineers.
Zeekr was launched in 2021 as Geely’s premium EV brand, showcasing the group’s advanced technologies, including in-house EV platforms and batteries. In the first quarter of this year, Zeekr sold 41,403 vehicles—up 25% from the same period last year—outpacing BYD’s premium brand Denza.
In May 2023, Zeekr went public in the United States with a $6.8 billion valuation, marking the first major U.S. IPO by a Chinese company since 2021.
However, recent developments have brought new challenges. Two Republican lawmakers in the U.S. recently wrote to the Securities and Exchange Commission (SEC), calling for 25 Chinese firms, including Zeekr, to be delisted due to alleged military links that could threaten U.S. national security. Zeekr has not commented on the letter.
Currently, over 100 Chinese firms are listed on U.S. exchanges, with a combined market value of around $1 trillion. Concerns about the potential forced delisting of these companies have resurfaced as tensions between the U.S. and China continue.
Meanwhile, China is reviewing a U.S. proposal to restart trade talks amid a series of tariff increases. Beijing is also preparing a list of American products to be exempt from its retaliatory tariffs.
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