- The final merger agreement prices Zeekr at $26.87 per ADS, up from the $25.66 proposed two months ago.
- The merger is currently expected to be completed in the fourth quarter of 2025, and Zeekr will delist from the NYSE.
Geely Automobile Holdings (HKG: 0175) and Zeekr Group (NYSE: ZK) have formally signed the final merger agreement, following a proposal two months ago to take Zeekr private.
Geely will acquire all Zeekr shares not already held by it, with Zeekr shareholders having the option to receive payment in cash or through a share swap for Geely shares, according to a statement released today.
The merger is currently expected to be completed in the fourth quarter of 2025, with Zeekr continuing as the surviving entity and becoming a wholly-owned subsidiary of Geely, according to the electric vehicle (EV) maker's statement.
Zeekr will delist from the New York Stock Exchange, and its investors can receive $2.687 in cash or 1.23 shares of newly issued Geely common shares for each Zeekr share.
Each ADS of the EV maker traded on the NYSE represents 10 ordinary shares, and ADS holders may receive $26.87 in cash per ADS or exchange it for 12.3 newly issued Geely shares, which will be delivered in the form of Geely ADSs, each representing 20 Geely shares.
Geely announced on May 7 that it had submitted a non-binding offer letter to Zeekr proposing to privatize the company at a valuation of $6.5 billion.
Geely's proposed purchase price was $2.57 per Zeekr share or $25.66 per ADS, representing a premium of about 13.6 percent over Zeekr's closing price on the previous trading day in the US stock market and a premium of 20.0 percent over the volume-weighted average price of Zeekr over the past 30 trading days.
The acquisition price announced today represents a premium of about 18.9 percent over Zeekr's ADS closing price on May 6 and a premium of about 25.6 percent over the volume-weighted average closing price over the 30 trading days prior to the disclosure of the proposal.
The higher acquisition price appears aimed at addressing concerns raised by some investors.
On May 30, Reuters reported that five early investors in Zeekr had written to its board, stating that Geely's proposed $2.2 billion privatization offer undervalued the company.
These five investors participated in Zeekr's first round of external financing in 2021, which raised $500 million, with Zeekr valued at $9 billion at the time, as noted by Reuters.
Zeekr was founded in March 2021 and launched its first model, the Zeekr 001, in April 2021, marking one of Geely's most significant efforts to enter the premium market.
The company listed on the NYSE on May 10, 2024, becoming the fourth Chinese EV maker to list in the US after Nio (NYSE: NIO), Li Auto (NASDAQ: LI), and Xpeng (NYSE: XPEV).
Zeekr's current market capitalization stands at $7.07 billion, below Nio's $9.37 billion.
Geely's acquisition of Zeekr is part of Zhejiang Geely Holding Group's ongoing efforts to integrate its resources.
This move marks a new key step in Geely Holding's implementation of the "Taizhou Declaration" and advancement of its “One Geely” strategy, Geely Holding said in a statement today.
Following the completion of the merger between Geely and Zeekr, Geely Holding aims to further enhance its strategic execution efficiency, innovation capabilities, and profitability, thereby creating greater value for all shareholders of the merged entity, Geely Holding said.
