STOCKHOLM (Reuters) - Truckmaker AB Volvo (VOLVb.ST) is to drop the CEO of Geely-owned Volvo Cars from its board, in a first sign of fallout from the Chinese carmaker’s swoop on Germany’s Daimler (DAIGn.DE).
Volvo Cars is a subsidiary of Zheijang Geely Holding Group Co whose main owner is Li Shufu, Geely’s founder, who revealed last week that he has built up an almost 10 percent stake in rival Daimler, which along with AB Volvo is one of the world’s biggest truckmakers.
Volvo Cars Chief Executive Hakan Samuelsson has been a board member of AB Volvo since 2016. He was the CEO of German truckmaker MAN (MANG.DE) until 2009, and became CEO of Volvo Cars in 2012, two years after Geely bought the company.
“The reason that Hakan Samuelsson is not proposed for re-election is the announcement that Geely Group has become the largest shareholder of the German vehicle manufacturer Daimler, one of the Volvo Group’s major competitors,” the AB Volvo election committee said in a statement on Monday.
But the Chinese company also struck a deal in December to buy activist investor Cevian Capital’s stake in truckmaker AB Volvo, comprising 8.2 percent of shares and 15.6 percent of voting rights in the truckmaker.
Cevian completed the stake sale in January, but the deal was structured so that Nomura International Plc and Barclays Capital Securities Limited would first buy the shares, and then sell them to Geely.
A Geely spokesman told Reuters that Geely’s acquisition of the AB Volvo stake was still pending Chinese government approval.
Bengt Kjell, head of Volvo’s election committee and a board member at AB Volvo’s largest owner by votes, Industrivarden (INDUa.ST), told Reuters he had only know about Geely’s Daimler purchase since Friday.
“We have of course also seen earlier speculations, but the confirmation came late on Friday, and we can only act on facts,” Kjell said.
He said any cooperation between the companies needed to come from a “management-operational perspective, and not from an owner with 10 percent being able to dictate, move around cooperations, or point from the above.”
“We have to take into account the interest of all shareholders, and not just the interest of a single large owner” Kjell said.
Reporting by Johannes Hellstrom. Editing by Jane Merriman; Editing by Keith Weir and Jane Merriman