Geely to sell $1.3 billion of Volvo Truck shares

China’s Zhejiang Geely Holding Group is selling the entirety of its Class B shares in truckmaker Volvo AB that were worth 14.46 billion Swedish krona ($1.32 billion) at the close of trading in Stockholm.

In a statement, Geely said the divestment is “in accordance with its long-term strategy” and that it will remain Volvo’s second-largest investor with 88.5 million A shares.

“Geely Holding’s strategic adjustment and inclusion of AB Volvo in its automotive manufacturing and investment portfolio is part of the group’s risk management and diversified investment strategy,” the company said.

Geely is offering the 49.5 million shares through BofA Securities, Goldman Sachs Bank Europe and Barclays, according to a term sheet. The Sweden-based holding company that owns Geely’s stock guided that it’s selling for SEK285.9 a share, a more than 2% discount from its closing price.

Volvo reported first-quarter operating profit that beat analysts’ expectations on Wednesday, as the truckmaker offset waning orders by charging higher prices. The company has been reducing production as demand returns to more typical levels following a post-pandemic recovery period. Its shares have advanced 12% this year.

Geely pared its stake in Volvo in January and also sold some of its holding in Volvo Car AB in November. The holding company behind one of China’s most prominent carmakers early this year had to bail out Polestar, the struggling electric-vehicle manufacturer it started along with Volvo Car.