Published by Global Banking & Finance Review®
Posted on May 30, 2025
4 min readLast updated: January 23, 2026
Geely's $2.2 billion offer to privatize Zeekr faces criticism from investors who argue the valuation is too low.
HONG KONG/SHANGHAI (Reuters) -China's Geely is undervaluing its premium electric car unit Zeekr with the $2.2 billion take-private offer it has made, five early investors in Zeekr have written to its board, according to three sources with direct knowledge of the matter.
The investors, including Contemporary Amperex Technology Co Ltd (CATL), Intel Capital and Boyu Capital, who invested in Zeekr's maiden fundraising round, have sent two letters written jointly to the company and a special committee formed to assess the offer, saying that the privatisation price was too low to reflect the fair value of Zeekr, the sources told Reuters.
Geely, one of China's most globally known automakers due to its purchase of foreign marquees such as Volvo and Proton, offered on May 7 to privatise Zeekr, saying it wanted to fully merge Zeekr into Geely Auto.
Geely Auto owns about two-thirds of Zeekr. Both companies sit under the umbrella of their unlisted parent, Geely Holding. Geely founder and chairman Eric Li also chairs the Zeekr board.
The move surprised the market and the auto industry, given how it came just a year after it took the EV brand public in the United States.
It has also raised questions on the prospects of two other Geely units preparing for Hong Kong listings, including ride-hailing firm CaoCao Inc, and raised questions over whether Geely might delist its other U.S.-listed units such as Polestar.
The other two investors who wrote the letters were Bilibili and Cathay Fortune Corp.
A spokesperson for Geely said that talks with Zeekr's special committee were ongoing.
Zeekr, CATL, Intel Capital, Boyu Capital, Cathay Fortune did not respond to requests for comment. Bilibili declined to comment.
The offer is non-binding according to Geely Auto's filing. A binding commitment will only arise upon the execution of definitive agreements, subject to the terms and conditions, it said.
IMPROVING THE STRATEGIC FOCUS
Li has pivoted Geely away from its history of aggressive acquisitions to streamlining operations and cutting costs amid a brutal price war in China's auto market, the world's biggest.
He launched last year a campaign to improve the group's strategic focus and eliminate internal competition, which has so far involved it restructuring its brands into two units and merging some teams that were working on digital cockpit technology.
Zeekr is now viewed as Geely's best asset - sales of the brand reached 41,403 units in the first quarter of this year with six models, increasing 25% from a year ago and outselling BYD's premium brand Denza.
The five investors said in the first letter they sent last week that the privatisation price only valued Zeekr at $6.5 billion, much lower than peers such as Li Auto, Nio and Xpeng, according to the three sources.
They said Zeekr has a better cash flow and profitability prospects than these peers, and urged the deal should only proceed after obtaining the agreement of the majority of the "independent minority" shareholders.
Two of the sources said the investors sent a second letter this week, reiterating what they said in the first letter and urging the Zeekr special committee to carefully review and evaluate the offer.
The five investors took part in Zeekr's first external fundraising round of $500 million that valued it at $9 billion in 2021. At the time, they together held a 6% stake in the company.
A subsequent fundraising round valued the EV maker at $13 billion in 2023 but a year later it went public at a valuation of $5.5 billion on a fully diluted basis, less than half of the pre-IPO figure.
Two of the sources said Y2 Capital, an investor in Zeekr's IPO, had sent a similar letter voicing concerns to Geely's leadership. Y2 Capital did not respond to a request for comment.
Geely's offer of $25.66 per American Depository Share of Zeekr represented a 24% premium to its average share price over the four weeks prior to the offer announcement. The average premium paid in U.S. take-private deals has been about 40% since 2023, according to LSEG data.
Zeekr shares are now trading above the offer price and last closed at $26.59.
However, analysts said that Geely Auto may have sufficient votes to carry out the privatisation without the need for other shareholder approvals given its 65.7% stake in Zeekr.
(Reporting by Julie Zhu and Kane Wu in Hong Kong, Zhang Yan in Shanghai; Writing by Brenda Goh; Editing by Muralikumar Anantharaman)
Geely has made a $2.2 billion take-private offer for its electric car unit, Zeekr.
The investors include Contemporary Amperex Technology Co Ltd (CATL), Intel Capital, Boyu Capital, Bilibili, and Cathay Fortune Corp.
The investors believe the $2.2 billion offer undervalues Zeekr, suggesting it should be valued higher based on its cash flow and profitability prospects.
In its first external fundraising round, Zeekr was valued at $9 billion in 2021.
Analysts suggest that Geely Auto may have enough votes to carry out the privatization without needing approval from other shareholders due to its 65.7% stake in Zeekr.
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