“Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo,” Geely Chairman Li Shufu said in a statement on Wednesday.
Geely’s expertise in the Chinese market and skills in developing electric and autonomous vehicles should help the truckmaker to expand, he added.
AB Volvo owns 45 percent of Dongfeng Commercial Vehicles, one of China’s largest truck makers, and also has a significant construction equipment business in China.
The value of the investment amounted to around 27.2 billion Swedish crowns ($3.26 billion), a Reuters calculation showed, although Geely and Cevian did not disclose the exact value of the transaction in their statement on Wednesday.
The deal makes Geely the biggest individual shareholder in AB Volvo and second ranked in terms of voting rights behind Swedish investment firm Industrivarden.
AB Volvo shares have gained more than 50 percent this year as it and rivals in the truck industry such as Germany's Daimler and Volkswagen hit a sweet spot thanks to robust demand in major markets.
Cevian, which has held shares in Volvo since 2006, this year called for a break-up, suggesting the smaller Volvo Construction Equipment and engine and technology firm Volvo Penta should be separated from the main truck making business.
As well as Volvo cars which it acquired in 2010, Geely also owns the company that makes London's black cabs and sports carmaker Lotus.
In a sign of its ambitions, the Chinese company last month offered to take a stake of up to 5 percent in Daimler via a discounted share placement but was rebuffed, according to sources with knowledge of the talks.
In the latest deal, Geely will acquire 88.5 million A shares and 78.8 million B shares to give it 15.6 percent of Volvo voting rights. Industrivarden owns mostly A shares and controls 22.8 percent of the votes.
Nomura International Plc and Barclays Capital Securities Limited have agreed to acquire Cevian Capital's shares, and will sell them to Zhejiang Geely Holding Group when the necessary regulatory approvals have been obtained, the companies said.
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