CHINA’S Geely Holding, owner of the Volvo car brand, is buying an 8.2 percent stake in Swedish truckmaker AB Volvo from activist investor Cevian Capital, worth around US$3.3 billion at current market prices.

Geely’s expertise in the Chinese market and skills in developing electric and autonomous vehicles should help the truckmaker to expand, although there were no plans to reunite with Volvo Cars, which was split from AB Volvo in 1999.

AB Volvo owns 45 percent of Dongfeng Commercial Vehicles, one of China’s largest truckmakers, and also has a significant construction equipment business in China.

“Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo,” Geely Holding chairman Li Shufu said in a statement Wednesday.

There are “no plans to merge” the two Volvos, a Geely spokesman said. Both companies are based in Gothenburg, Sweden’s second-largest city.

The value of the investment amounted to 27.2 billion Swedish crowns (US$3.26 billion).

Swedish daily Dagens Nyheter said Geely paid 3.25 billion euros (US$3.86 billion) for the stake, citing a source with knowledge of the deal. Geely and Cevian declined to disclose the exact value of the transaction.

The deal makes Geely the biggest individual shareholder in AB Volvo.

Sales and profitability at Volvo Cars has jumped under Geely. The car business made an operating profit of 10.4 billion Swedish crowns in the first nine months this year, up from 1.6 billion for 2011, the year after Geely bought Volvo from Ford.

In a sign of its ambitions, Geely last month offered to take a stake of up to 5 percent in Daimler via a discounted share placement but was rebuffed, according to sources with knowledge of the talks. (SD-Agencies)