by Geely wants to fully buy out Zeekr
Chinese auto giant Geely is offering $2.2 billion for the remaining shares of the electric vehicle brand Zeekr, which went public just a year ago. However, investors believe the price is undervalued compared to competitors like Nio or Xpeng.
In 2023, Zeekr was valued at $13 billion, but after its IPO in the U.S., its market capitalization dropped to $5.5 billion. Now Geely, which owns 65.7% of the shares, wants full control of the company.
Investors disagree with the offer
Major investors such as CATL, Intel Capital, and Boyu Capital have expressed dissatisfaction with Geely’s proposal. They sent a letter stating that the company’s valuation of $6.5 billion is underestimated.
Shareholders demand that the deal be approved by a majority of independent minority shareholders
However, Geely will likely be able to proceed with the deal even without their approval, as it holds a controlling stake. After the announcement of the potential buyback, Zeekr’s shares rose above the proposed price of $25.66 per share.
The situation with Zeekr demonstrates how volatile the valuation of electric vehicle startups can be. The drop in market capitalization after the IPO and the disputes between the majority owner and minority investors highlight the difficulty of balancing interests in this industry. This is especially true against the backdrop of a general decline in EV sector investments in 2024.
