Zeekr announces strategic integration transactions with Geely

Zeekr (ZK) announced its entry into strategic integration transactions with certain Geely entities, including Zhejiang Geely, a PRC limited liability company ultimately wholly-owned by Shufu Li and his associates, Volvo Cars Investment, a wholly-owned PRC subsidiary of Volvo Car AB, which itself is Geely Holding’s indirect, non-wholly-owned subsidiary in Sweden, Ningbo Geely, a wholly-owned PRC subsidiary of Geely Automobile, Zeekr’s controlling shareholder, and Lynk & Co Automotive Technology Co, a Chinese-foreign joint venture in China owned as to 50%, 20% and 30% respectively by Ningbo Geely, Geely Holding and VCI. Lynk & Co is principally engaged in the manufacture and sale of Lynk & Co brand vehicles and the after-sales parts. The strategic integration transactions are expected to close substantially concurrently, subject to the respective closing conditions set forth in the transaction documents. Upon completion, Lynk & Co will become Zeekr’s indirect non-wholly-owned subsidiary, and the financial results of Lynk & Co will be consolidated into the financial statements of Zeekr. Zeekr’s board of directors formed a committee of independent directors consisting of Miguel Lopez Ben, Stephen Brown Davis and Michael David Ricks, to consider and evaluate the strategic integration transactions. The committee was advised by its independent financial advisor, Houlihan Lokey, which delivered a fairness opinion stating that, as of the date of the opinion, the consideration to be paid by Zeekr in the equity transfer and the capital injection pursuant to the Lynk & Co equity transfer agreement and the Lynk & Co capital injection agreement is fair to the company from a financial point of view. Zeekr’s board of directors, upon the unanimous recommendation of the committee, approved the strategic integration transactions. The company was notified that, also on November 14, a sale and purchase agreement was entered into between Geely International, a limited liability company incorporated in Hong Kong wholly owned by Geely Holding and Luckview Group, a limited liability company incorporated in the British Virgin Islands and a wholly-owned subsidiary of Geely Auto, pursuant to which GIHK will sell and Luckview will purchase approximately 11.3% of Zeekr’s issued share capital for a consideration of $806.1M. Immediately after completion of this sale and purchase of Zeekr shares, Geely Auto’s shareholding in Zeekr will increase to approximately 62.8%.