By Jiahui Huang


Geely Automobile's Hong Kong-listed shares fell sharply after it disclosed subsidiary Zeekr plans to take control of Lynk & Co, raising investor concerns over the impact of the deal.

Shares of Geely fell 6.5% to 13.00 Hong Kong dollars, equivalent to US$1.67. The benchmark Hang Seng Index was last up 0.65%.

The losses came after Geely said Thursday that Zeekr will buy a 50% stake in Lynk & Co from Volvo Car and Geely for around $1.25 billion. The acquisition, alongside a capital injection into Lynk & Co by Zeekr of around 367.3 million yuan, equivalent to $50.3 million, will result in Zeekr holding a 51% stake in Lynk & Co.

"The selloff shows that market didn't buy into the deal," said Bocom International auto analyst Angus Chan.

Once a sub-brand of Geely, Lynk & Co was founded in 2017 as a joint venture between Swedish automaker Volvo Car and Geely. Although the venture has had a decent presence in overseas market, its Chinese sales haven't been particularly robust.

According to a filing by Geely on Thursday, Lynk & Co reported a loss of 1.10 billion yuan last year, compared with profit after tax of 7.2 million yuan in 2022.

Meanwhile, Zeekr, which focuses on the premium electric-vehicle market, has reported strong sales, and was listed in New York early this year. The automaker's total vehicle deliveries rose 51% to 55,003 units for the third quarter.

"Investors may have some concerns on the finances and performance of the acquisition and are uncertain about if the deal would be as effective as Geely wished," CCB International analyst Qu Ke said.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

11-14-24 2210ET