Geely Auto (00175) plans to spend 221 million euros to acquire 34% of Ford's Spanish plant to promote localized production in Europe

According to the Zhitong Finance App, Geely Auto (00175) announced that on July 23, 2026, Geely SPV, a wholly-owned subsidiary of the company, plans to acquire 34% of Ford España, S.L., from Ford NL at a cost of 221 million euros, but at the time of completion, the settlement accounts will need to be adjusted according to convention according to the target company's net debt, working capital status and asset range. Upon completion, the target companies will have 66% and 34% of the shares of Ford NL and Geely SPV respectively.

On the same day, Geely SPV, Ford NL and the target company entered into a joint venture agreement to regulate the management and operation of the target company. After completion, the target company will operate as a joint venture between the Group and Ford Group to contract manufacture passenger cars at its plant in Almussafes, Valencia, Spain. The contracting parties have also agreed that if the target company is unable to obtain external financing or is unable to obtain financing on commercially reasonable terms, they will provide capital to the target company in the form of shareholder loans based on their respective equity ratios.

According to reports, Ford NL is a wholly-owned subsidiary of Ford Motor Company. Ford NL is mainly engaged in the wholesale and retail distribution of automobiles, as well as related businesses (including sales of auto parts and accessories, as well as car rental and rental services).

According to the announcement, the acquisition and establishment of a joint venture will allow the group to directly enter mature production platforms in Europe, so that it can produce some Geely brand cars locally for the European market and support the Group's localization strategy in Europe. Through the establishment of a joint venture, the Group expects to benefit from the Valencia plant's existing production capacity, experienced workforce and supply chain network, thereby speeding up its market deployment in Europe while reducing the execution risks and capital requirements involved in independently building a new production site.

The directors believe that the minority shareholding structure can align the interests of the contracting parties and at the same time allow the target company to benefit from the operating knowledge, production projects and resources contributed by the two shareholders. The joint venture structure also enables the contracting parties to share investment risks and operating responsibilities while leveraging their respective strengths to support the long-term development of the target company.

The Valencia plant is one of Europe's major automobile manufacturing plants and is expected to be a production center shared by the contracting parties. It is expected that this cooperation will improve capacity utilization and operational efficiency, generate economies of scale through shared production resources and expertise, and reduce certain development and production costs.

The establishment of the joint venture is also expected to support the contracting parties in the development and production of low-emission and zero-emission new energy vehicles in Europe. Furthermore, by supporting the sustainable operation and development of the Valencia plant, it is expected that this cooperation will make a positive contribution to the local automotive ecosystem and job market.