logo
Geely's electric vehicle US delisting is shrewd

Geely's electric vehicle US delisting is shrewd

Reuters08-05-2025

HONG KONG, May 8 (Reuters Breakingviews) - Sometimes a U-turn is necessary. China's Geely Auto (0175.HK), opens new tab is offering, opens new tab to take electric-vehicle unit Zeekr (ZK.N), opens new tab private less than a year after the company's debut in New York. Absorbing the $6.4 billion entity will help Geely group founder Li Shufu extract synergies from his auto empire in an opportunistically timed deal.
The buyout proposal announced on Wednesday offers cash of $25.66 per Zeekr American Depositary Receipt, equivalent to a roughly 14% premium to the previous day's closing price. Geely Auto shareholders welcomed the deal; its Hong Kong-listed stock rose some 5% the following morning. They have multiple reasons to cheer on the transaction.
The broader Geely group and Li together hold multiple marques, from Volvo Cars (VOLCARb.ST), opens new tab to Lotus Technology as well as suppliers and even a satellite specialist. At least eight of those businesses are listed. As well as adding complexity, different brands risk cannibalising each other's markets and resources. In September, Li called for, opens new tab greater focus and efficiency.
The outlay looks manageable too. As Geely Auto, Li and Zeekr CEO An Conghui own more than 80% of the target company's stock, Geely would need to pay out just $1.3 billion to buy back the remainder. Geely Auto's net cash position should cover this. Its total spend could be even less if some investors opt instead for newly issued shares in the offeror.
The deal is affordable by other metrics too. It values Zeekr at 0.4 times estimated revenue for 2026, according to analyst estimates gathered by Visible Alpha – less than half the average for peers Nio (9866.HK), opens new tab, Xpeng (9868.HK), opens new tab and Li Auto (2015.HK), opens new tab. Although the offer is 22% above Zeekr's IPO price, the shares were trading as high as $32 a piece in mid-March. Here, Li may be able to thank U.S. President Donald Trump.
The deteriorating Sino-American relationship may have weighed on Zeekr's stock. It is one of only a handful of large U.S.-listed Chinese entities that do not have a listing in China or Hong Kong to fall back on should American lawmakers succeed in pressuring, opens new tab the U.S. Securities and Exchange Commission to delist Chinese companies.
Li will bear one big cost, however. Zeekr's abrupt change of strategic direction may leave investors wary of similarly sudden moves in the future. That could undermine his credibility when he attempts other listings, such as ride-hailing group CaoCao's planned Hong Kong IPO, opens new tab. For now, the Chinese auto tycoon is seizing the day.
Follow @KatrinaHamlin, opens new tab on X
Geely Auto on May 7 offered to take private its New York-listed electric vehicle unit Zeekr Intelligent Technology, valuing the company at $6.5 billion.
The Chinese parent offered to pay $25.66 per Zeekr American Depositary Receipt, a premium of about 14% to Zeekr's closing price on May 6. Zeekr ADS holders can also opt to receive 12.3 newly issued Geely shares.
Geely owns 65.7% of Zeekr. After the offer was announced, Zeekr shares closed the day's trade up nearly 12% at $25.19.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Has remote working opened a global talent pool for businesses?
Has remote working opened a global talent pool for businesses?

Times

time6 minutes ago

  • Times

Has remote working opened a global talent pool for businesses?

As competition for skilled staff intensifies, firms can take advantage of a 24/7 workforce across time zones Caption here pls.... Major events in recent years have resulted in more professionals working in a flexible mix of home and office settings, even across borders – but forward-thinking employers have enjoyed the benefits of hybrid setups for much longer. Now, more businesses are beginning to recognise the considerable potential upsides of taking a similar approach, with a borderless workforce. In fields like tech, fintech and creative industries such as gaming – where competition for talent is especially fierce – being able to search in a far larger talent pool from all over the world can make a significant difference when it comes to successful recruitment. Offering the ideal candidate the flexibility to work where they choose also makes them far more likely to say yes. For companies weighing economic pressures and geopolitical uncertainty, a remote workforce can offer a compelling solution to persistent hiring headaches – but there are wider benefits too. With technology powering a round-the-clock business culture, organisations that are able to keep projects moving by handing them off across time zones gain a serious edge over competitors. Productivity doesn't stop at close of play. This is before the additional practical incentives are considered – reduced office costs, regionally adjusted remuneration rates and the ability to have local teams engaging directly with international clients. Secondary factors also come into play. For companies focused on ESG, operating in a more sustainable way through distributed teams can become a meaningful part of their environmental and social impact profile. Of course, managing teams across multiple world regions brings challenges of its own. From embedding a brand's ethos and rolling out consistent working practices, to ensuring full compliance with local tax and employment law, complexity can multiply quickly. One of the fastest-growing HR tech companies in the world, Deel has the expertise to help organisations make this kind of transformation a reality. Deel's intuitive platform cross-references legal frameworks across more than 100 countries, giving businesses everything they need to hire internationally at speed and scale – without the need to set up full operations in each region or wade through regulatory red tape. Instead of hiring local professional employer organisations in every new market, Deel offers businesses a single, legally compliant, tech-led solution. Its Global Payroll platform, for instance, consolidates payroll across multiple countries into one streamlined system – easy to update, monitor and use for data reporting. Valued at $12 billion [£9.4 billion] in its most recent funding round, Deel supports over 35,000 businesses in more than 150 countries. With this extensive global reach, Deel has become a leading voice in international employment trends. Its 2024 report, The State of Global Hiring , offers valuable insights into how and where companies are building cross-border teams. Deel works with startups, scale-ups and larger enterprises alike, providing a single platform to manage everything from onboarding to offboarding – including contracts, tax documentation and global payroll – with efficiency and full compliance. Acting as both legal shield and operational backbone, Deel enables UK companies to build global teams without the friction of international hiring. It's a way to sidestep domestic talent shortages and fill key skill gaps – bringing the future of work within reach today. This a commercial article paid for by our advertising partners Visit to request a free demonstration and see how your business could be transformed

Adani eyes airport unit IPO by 2027, accelerates $100 billion capex pace, Bloomberg News reports
Adani eyes airport unit IPO by 2027, accelerates $100 billion capex pace, Bloomberg News reports

Reuters

time24 minutes ago

  • Reuters

Adani eyes airport unit IPO by 2027, accelerates $100 billion capex pace, Bloomberg News reports

June 12 (Reuters) - Billionaire Gautam Adani's group is planning to list its Adani Airports unit by 2027, as part of a growth plan that requires investing $100 billion across businesses over the next few years, Bloomberg News reported on Wednesday. The unit is set to be spun off and listed by March 2027, the report said, citing Adani Group executives who spoke on the condition of anonymity. Adani Airports operates eight airports across India, including the Navi Mumbai International Airport, located in the outskirts of India's financial hub, which the company expects will be operational soon. The company also doubled the pace of its capital spending plan and now expects to allocate $100 billion in five to six years instead of spreading it out over a decade as announced before, the report added. The airport unit secured a $750 million investment last week from a consortium of international banks. Part of the funds will be used to refinance debt of $400 million. Reuters could not immediately verify the report, and Adani Group did not immediately respond to a request for a comment.

Bank of Korea chief says excessive rate cuts could cause price upswing in property markets
Bank of Korea chief says excessive rate cuts could cause price upswing in property markets

Reuters

timean hour ago

  • Reuters

Bank of Korea chief says excessive rate cuts could cause price upswing in property markets

SEOUL, June 12 (Reuters) - South Korea's central bank governor said on Thursday "excessive" policy interest rate cuts could cause another round of price upswings in the property market and increase volatility in currency markets, although the domestic economy remains sluggish. "If we rely too much on economic stimulus policies out of urgency, there may be greater side effects later on. For example, if we cut the base interest rate excessively, there is a high risk that it will lead to a rise in real estate prices," Governor Rhee Chang-yong said in a speech prepared for the bank's 75th anniversary. His comments come after the bank flagged more rate cuts to come on the day it trimmed borrowing costs by a quarter percentage point to 2.5% on May 29, to reflect the impact of the U.S. trade tariffs and tepid domestic consumption. The widely expected rate cut, the fourth in the current easing cycle, came as the newly elected President Lee Jae-myung geared up for major stimulus measures including this year's second extra budget to boost growth. Rhee's concerns about excessively cutting interest rates also stemmed from recent currency market volatility. "The gap between domestic and foreign interest rates may widen further as the U.S. Federal Reserve adjusts the pace of its interest rate cuts, and uncertainty surrounding the results of trade negotiations with major countries may increase, leading to increased volatility in the foreign exchange market," Rhee said in the speech.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store