[ET Net News Agency, 12 February 2020] S&P Global Ratings said today that the
cost-effectiveness and research and development (R&D) of Geely Automobile Holdings Ltd.
(Geely Auto, BBB-/Stable/--)(00175) are likely to benefit from the company's proposed
merger with Volvo Car AB (BB+/Positive/--).
However, the credit rating agency does not see any immediate rating impact on Geely Auto
and its parent Zhejiang Geely Holding Group Co. Ltd. (BBB-/Stable/--), given that the
transaction is still at the preliminary stage.
S&P believes Zhejiang Geely Holding, which currently owns 44.1% of Geely Auto and 99% of
Volvo Car, will maintain majority control in the combined entity post the merger.
Since Zhejiang Geely Holding acquired Volvo Car in 2010, Geely Auto and Volvo Car have
closely collaborated on technology development and procurement among other things, leading
to enhanced competitive strengths and notable cost savings for both. (KL)