The merger between Geely Auto and Zeekr has made new progress.
On July 15, Geely Automobile Holdings Limited (Geely Auto, 00175.HK) announced on the Hong Kong Stock Exchange that it had officially signed a merger agreement with Zeekr Intelligent Technology Co., Ltd. (Zeekr, NYSE: ZK). Geely Auto will acquire all Zeekr shares that it does not yet hold and privatize it.
Zeekr shareholders can choose to receive cash or Geely Auto shares as consideration: US$2.687 in cash or 1.23 consideration shares for each Zeekr share; or US$26.87 in cash or 12.3 consideration shares (to be delivered in the form of Geely American Depositary Shares) for each Zeekr American Depositary Share.
The issue price of each Consideration Share is HK$17.15, which represents a premium of approximately 2.4% over the closing price of HK$16.74 per share as quoted on the Stock Exchange on the last trading day immediately prior to the date of the non-binding quotation letter.
The announcement stated that assuming all Zeekr shareholders choose to receive cash consideration and the privatization is carried out entirely in cash, the total cash consideration payable by Geely Auto will be US$2.399 billion (equivalent to approximately RMB 17.199 billion), including US$1.048 billion (equivalent to approximately RMB 7.518 billion) payable to related Zeekr holders.
The announcement stated that as of the announcement date, Geely Auto holds approximately 62.8% of the total issued and outstanding shares of Zeekr (on a fully diluted basis). After the privatization is completed, Geely Auto's Merged Subsidiary will merge with Zeekr, and Zeekr will continue to exist in the merger. After the merger, Zeekr will become a wholly-owned subsidiary of the company, be privatized and delisted from the New York Stock Exchange.
Geely said that this move marks another key step for Geely Holding Group to implement the spirit of the Taizhou Declaration and promote the return to the "One Geely" strategy. Since the release of the Taizhou Declaration, Geely Holding Group has unswervingly promoted the deep integration and efficient fusion of internal resources, eliminated duplicate investment, and improved the overall competitiveness of the enterprise. After the completion of the merger of Geely Auto and Zeekr, Geely Auto's strategic execution efficiency, innovation capabilities and profitability will be further improved, creating greater value for all shareholders after the merger.
Geely also said that the merger aims to strengthen Geely Auto's global competitiveness and growth in the field of smart new energy vehicles. Zeekr's advantages in the field of luxury new energy vehicles, combined with Geely Auto's deep roots in the mainstream market, will strengthen synergy in technology, products, supply chain, manufacturing, marketing and services, and international market expansion, improve innovation capabilities, and stimulate economies of scale. After the merger, Geely Auto will achieve comprehensive coverage of multiple power forms such as fuel, pure electric, plug-in hybrid, and alcohol-hydrogen electric, and complete a full-scale layout of the mainstream, mid-to-high-end, and luxury car markets, comprehensively enhancing competitiveness and corporate value.
On May 7 this year, Geely Automobile announced that the company submitted a non-binding offer letter to Zeekr on the same day, proposing to privatize Zeekr and acquire all issued and outstanding Zeekr shares and American depositary shares (excluding the beneficial owners of the Group).
The financial report shows that in 2024, Geely Auto's revenue exceeded 240 billion yuan for the first time, reaching 240.2 billion yuan, a year-on-year increase of 34%, a historical high; the full-year net profit attributable to the parent was 16.6 billion yuan, a year-on-year increase of 213%; the net profit attributable to the parent after deducting non-recurring items was 8.5 billion yuan, a year-on-year increase of 52%, and operating profitability has significantly improved.
In 2024, Zeekr achieved revenue of 75.913 billion yuan, an increase of 46.9% over the same period last year; the full-year net loss was 5.791 billion yuan, a year-on-year reduction of 29.9%.
In terms of sales, Geely Auto's cumulative sales in the first half of the year exceeded 1.409 million units, a year-on-year increase of 47%. Among them, the sales of new energy vehicles (including Geely, Lynk & Co, and Zeekr) reached 725,200 units, a year-on-year increase of 126%.
Zeekr's sales in June were 16,700 vehicles, down 16.94% year-on-year; its cumulative sales in the first half of the year were 90,700 vehicles, up 3.27% year-on-year.
