Zeekr Group (ZK) announced completion of its merger with Keystone Mergersub

The formal completion of the merger between [Zeekr Intelligent Technology Holding Limited (ZK) and Keystone Mergersub Limited on December 22, 2025, represents a definitive turning point in the trajectory of the Chinese new energy vehicle (NEV) sector. This transaction, which resulted in Zeekr becoming a wholly-owned subsidiary of Geely Automobile Holdings Limited ("Geely Auto") and its subsequent delisting from the New York Stock Exchange (NYSE), is far more than a financial restructuring. It is a strategic capitulation to the new geopolitical and economic realities of 2025, marking the end of the "expansion at all costs" era for Chinese EV startups in Western capital markets.

The transaction, valuing Zeekr at approximately USD 6.85 billion, concludes a brief 19-month tenure as a public company—one of the fastest IPO-to-privatization cycles in automotive history. While the privatization was executed at a valuation lower than the company's peak private market valuation of USD 9 billion in 2021, creating friction with early strategic investors like CATL and Intel Capital, it serves a higher strategic imperative for the Geely Holding Group.

The consolidation is driven by three primary forces:

• Operational Efficiency: The immediate integration of Zeekr with the Lynk & Co brand under the new "Zeekr Technology Group" structure aims to eliminate rampant internal cannibalization and target RMB billions in R&D and procurement synergies.
• Geopolitical De-risking: The "Trump 2.0" administration's escalating tariff regime and the European Union's protectionist trade barriers have rendered a US listing a strategic liability. Delisting insulates Zeekr from US regulatory volatility and data security scrutiny.
• Capital Market Arbitrage: By consolidating Zeekr’s high-growth assets into the Hong Kong-listed Geely Auto (0175.HK), the group seeks to correct a valuation disconnect and prepare for a potential future re-listing in mainland China (A-shares), where valuation multiples for "national champions" remain robust.

This report provides an exhaustive analysis of the merger mechanics, the financial landscape, the operational integration roadmap, and the geopolitical context that necessitated this drastic strategic pivot.

Transaction Overview and Deal Mechanics

The privatization of Zeekr was a meticulously engineered "take-private" transaction designed to balance the liquidity needs of minority shareholders with the capital constraints of the parent company, Geely Auto. The deal structure, approved by shareholders on September 15, 2025, utilized a combination of cash and equity to facilitate the buyout.

The Merger Agreement and Consideration

On December 22, 2025, Zeekr filed the necessary documentation to suspend trading of its American Depositary Shares (ADSs) on the NYSE. The merger agreement stipulated that Keystone Mergersub Limited, an indirect wholly-owned subsidiary of Geely, would merge with and into Zeekr, with Zeekr surviving as a wholly-owned subsidiary.

The consideration offered to shareholders was structured to provide flexibility, though it came with complex eligibility requirements:

Table 1: Merger Consideration Breakdown

Security Type	Cash Consideration	Share Consideration (Geely Auto - 0175.HK)	Implied Value Basis
Zeekr Ordinary Share	USD 2.687	1.23 newly issued Geely Shares	~18.9% Premium to May 6, 2025 Close
Zeekr ADS (10 Shares)	USD 26.87	12.3 newly issued Geely Shares (delivered as Geely ADSs)	~18.9% Premium to May 6, 2025 Close

The cash option represented a modest premium of approximately 18.9% over the closing price of Zeekr ADSs on May 6, 2025, the last trading day prior to the initial disclosure of the privatization proposal. This premium, while standard for take-private deals, was significantly below the expectations of investors who had bought in during the IPO at USD 21.00 per ADS or during the 2021 private rounds.

Shareholder Elections and Capital Structure Impact

A notable feature of this transaction was the high uptake of the share consideration option. According to filings, approximately 70.8% of eligible Zeekr holders opted to receive Geely shares rather than cash. This resulted in Geely issuing approximately 777.2 million new ordinary shares.

This high election rate for equity implies two critical market sentiments:

• Long-Term Confidence: Institutional investors, despite the short-term volatility, retain conviction in the Zeekr asset and prefer to hold it through the parent company rather than crystallizing losses at the cash offer price.
• Geely's Cash Preservation: The high equity election was advantageous for Geely Auto, reducing the immediate cash outlay required to close the deal to approximately USD 701 million. This preservation of liquidity is vital as the group faces capital-intensive investments in autonomous driving and global expansion.

Regulatory Nuances: The "Hong Kong Non-Professional" Exclusion

The transaction included a specific carve-out for "Hong Kong Non-Professional Investors." These investors were legally barred from electing the share consideration and were forcibly cashed out at the USD 2.687 per share price. This restriction stems from Hong Kong's strict securities laws regarding public offers. Since the issuance of new Geely shares constituted a securities offering, doing so to non-professional (retail) investors in Hong Kong would have triggered prospectus requirements that Geely sought to avoid to expedite the timeline. This nuance underscores the complexity of cross-border privatizations involving a Cayman Island-incorporated, US-listed target and a Hong Kong-listed acquirer.

De-listing and De-registration Process

Following the effective time of the merger, Zeekr moved swiftly to dismantle its US public company infrastructure:

• Form 25: Filed with the SEC to formally delist the ADSs from the NYSE.
• Form 15: Filed to suspend reporting obligations under the Securities Exchange Act of 1934. This effectively terminates Zeekr's obligation to file annual reports (Form 20-F) and interim reports (Form 6-K).
• Form 15F: Geely Auto, as the successor registrant, filed Form 15F to immediately suspend its own substituted reporting obligations, ensuring that the parent company did not inadvertently become subject to US reporting requirements.

This "going dark" process shields Zeekr's operational data from US regulatory bodies, a move that aligns with Beijing's increasing emphasis on data sovereignty for technology companies.

Financial Forensics: The Valuation Disconnect

To fully understand the impetus for privatization, one must examine the financial health of Zeekr in the quarters leading up to the merger. The company was in a precarious position: delivering strong top-line growth and operational improvements, yet suffering from a valuation in US public markets that failed to reflect its long-term potential due to the "China Discount."

Q3 2025 Financial Performance Analysis

Zeekr's unaudited financial results for the third quarter of 2025, released in November 2025, provided the final public snapshot of the company's health.

• Revenue Trajectory: The company reported total revenues of RMB 31.56 billion (USD 4.43 billion) for Q3 2025, a robust 9.1% year-over-year increase. This growth was driven by vehicle deliveries of 52,860 units for the Zeekr brand alone. While impressive, the growth rate had begun to normalize compared to the explosive triple-digit growth seen in 2023-2024, signaling that the company was entering a more mature phase of its lifecycle.
• Margin Expansion: The most positive indicator was the gross margin expansion. Gross margin reached 19.2% in Q3 2025, up significantly from 15.2% in Q3 2024. Even more critical was the vehicle margin, which stood at 15.6%. In the context of the fierce price war in China—where competitors were slashing prices to move metal—Zeekr's ability to expand margins suggests strong product differentiation and cost discipline.
• Loss Narrowing: Net loss for the quarter was RMB 307 million (USD 43 million), a massive 84.9% improvement from the RMB 2.028 billion loss in the same period of 2024. This rapid convergence toward breakeven likely emboldened Geely to take the company private; the parent company is absorbing an asset that is on the cusp of profitability, rather than a cash-burning liability.

Table 2: Key Financial Metrics Comparison (Q3 2024 vs Q3 2025)

Metric	Q3 2024	Q3 2025	YoY Change
Total Deliveries	~47,000	52,860	+12.5%
Total Revenue	RMB 28.92B	RMB 31.56B	+9.1%
Gross Profit	RMB 4.41B	RMB 6.05B	+37.1%
Gross Margin	15.2%	19.2%	+4.0 pts
Net Income (Loss)	(RMB 2.03B)	(RMB 0.31B)	+84.9%

The "Down Round" and Strategic Investor Dissent

Despite the improving fundamentals, the privatization valuation of approximately USD 6.85 billion represented a significant destruction of value for early investors.

• The Pre-A Benchmark: In 2021, Zeekr raised USD 500 million in a Pre-A round led by Intel Capital, CATL, Bilibili, and Cathay Fortune Group, which valued the company at approximately USD 9 billion.
• The IPO Benchmark: The May 2024 IPO valued the company at nearly USD 7 billion, with shares priced at USD 21.00.
• The Privatization Price: The cash offer of USD 2.687 per share (equivalent to USD 26.87 per ADS) was a premium over the trading price but arguably a discount to intrinsic value.

Reports surfaced in May 2025 that five early investors, including CATL and Intel Capital, wrote letters to the special committee arguing that the privatization offer undervalued the company. Their dissatisfaction highlights the divergence between private market valuations of the "easy money" era (2020-2021) and the harsh reality of public markets in 2025. Geely's decision to proceed despite this dissent indicates that the strategic benefits of consolidation—control, speed, and integration—outweighed the need to maintain amicable relations with these minority financial partners.

The Geopolitical Imperative: Why Leave the US?

The privatization of Zeekr cannot be viewed in isolation from the macro-political environment. The decision to exit the US capital markets is a defensive maneuver against the escalating economic warfare between Washington and Beijing. The risks of remaining a US-listed Chinese technology company have shifted from "manageable" to "existential."

The "Trump 2.0" Trade Agenda

The return of Donald Trump to the White House has accelerated the decoupling of US and Chinese supply chains. The administration's trade policy has moved beyond simple tariffs to a comprehensive containment strategy targeting the automotive and semiconductor sectors.

• Semiconductor Restrictions: New regulations scheduled for 2027 will impose stacking tariffs and export controls on semiconductors involved in Chinese supply chains. For a company like Zeekr, which markets itself on high-tech "smart" features powered by advanced silicon (often from US suppliers like NVIDIA Corp (NVDA) or Qualcomm (QCOM)), these restrictions pose a severe threat to its bill of materials and product roadmap.
• The 100% EV Tariff: The US has effectively walled off its automotive market with 100% tariffs on Chinese EVs. While Zeekr had not yet entered the US retail market, a NYSE listing implies a global ambition that includes North America. Retaining a US listing while being locked out of the US consumer market creates a narrative dissonance that depresses stock valuation.

The EU Trade Fortress

Europe, previously seen as the "open" alternative to the US, has also erected barriers. Following an anti-subsidy investigation, the EU imposed tariffs of up to 45.3% on Chinese EVs. China responded with retaliatory tariffs on EU dairy and pork.

• Volatility Management: For a public company, every headline regarding these trade disputes triggers algorithmic selling. By taking Zeekr private, Geely removes the stock from the daily volatility of trade war news cycles. It allows the company to execute its European strategy—likely involving localized production to circumvent tariffs—without the quarterly scrutiny of public investors demanding immediate margin clarity.

Data Security and Regulatory Compliance

Smart EVs are increasingly viewed by regulators as "data vacuums," collecting vast amounts of geospatial and user behavior data.

• The "1260H" Risk: There is a growing risk of Chinese autonomous driving companies being added to the US Department of Defense's "Section 1260H" list of Chinese military companies. Being listed on the NYSE while subject to such designation would be catastrophic.
• Chinese Regulations: concurrently, Beijing has tightened rules on the export of mapping data. A US-listed company faces the impossible task of satisfying US audit requirements (PCAOB) while adhering to Chinese data security laws. Privatization resolves this conflict by removing the US audit requirement entirely.

Strategic Rationale: The "One Geely" Restructuring

While geopolitics provided the external pressure, the internal driver for privatization was the urgent need to rationalize Geely's sprawling and inefficient brand portfolio. The "Taizhou Declaration," announced by Chairman Li Shufu in September 2025, marked the official end of Geely's "brand proliferation" phase and the beginning of a "consolidation" phase.

The Cannibalization Crisis

Geely's multi-brand strategy had resulted in severe overlap, particularly between Zeekr and Lynk & Co.

• Original Positioning: Lynk & Co was established as a premium ICE/Hybrid brand (joint venture with Volvo), while Zeekr was the pure-play electric luxury brand.
• The Blur: As Lynk & Co transitioned to EVs (e.g., the Z10 and Z20 models), the distinction collapsed. Both brands were selling premium EVs on the same SEA architecture, targeting the same demographic (young, affluent, tech-savvy), often in the same shopping malls.
• The Result: Operational inefficiency. Separate R&D teams were developing similar software stacks; separate marketing teams were bidding against each other for ad space.

The "Zeekr Technology Group" Solution

The privatization facilitates a radical restructuring: the merger of Zeekr and Lynk & Co into a single operating unit, the "Zeekr Technology Group."

• Ownership Flip: In a complex internal transaction announced alongside the merger, Zeekr acquired a controlling 51% stake in Lynk & Co, with the remaining 49% held by a Geely Auto subsidiary. This effectively subordinates Lynk & Co to Zeekr.
• Unified Governance: This structure removes the complexity of Lynk & Co being a JV with Volvo Cars. It centralizes decision-making under Zeekr’s management, ensuring a unified product strategy.

Synergies and Cost Reductions

Geely management has quantified the expected synergies from this integration:

• R&D Efficiency: By combining the engineering teams, Geely expects to reduce R&D costs by 10-20%. This eliminates the duplication of effort in developing battery packs, e-motors, and smart cockpit software.
• Procurement Scale: A 5-8% reduction in bill-of-materials (BOM) costs is targeted by pooling the purchasing volume of both brands.
• Sales Network: The group plans to consolidate the sales networks. Zeekr’s 300+ retail stores will be integrated into a unified "Geely Premium" network, increasing the points of sale for Lynk & Co while improving the efficiency of the retail footprint.

Operational Roadmap: 2026 and Beyond

With the distraction of the US listing removed and the integration with Lynk & Co underway, Zeekr is poised for an aggressive operational expansion in 2026.

Product Pipeline

The combined entity has an ambitious product launch schedule designed to cover all major premium segments.

• 2025 Launches: The Zeekr brand will launch three new models, while Lynk & Co will launch two.
• Key Models: The Zeekr 7X (SUV) and the updated Zeekr 007 (Sedan) are critical volume drivers. The 007 update has been strategically delayed to Q2 2026 to ensure software perfection, a luxury of time afforded by privatization.
• Flagship Continuity: Despite rumors, the company has confirmed the continuation of the Zeekr 001, the brand's halo shooting brake model, which will likely see a major refresh on the unified tech stack.

Sales Targets

The "Zeekr Technology Group" has set a combined sales target of 710,000 units for 2025.

• Zeekr Brand: Targeting 320,000 units.

• Lynk & Co: Targeting 390,000 units.

  Achieving this volume would place the group firmly in the "major league" of global premium automakers, approaching the scale of Volvo Cars (which sold ~700k units globally in previous years) and surpassing emerging rivals like Nio and Xpeng.

Technological Moats

The "One Geely" strategy emphasizes shared technological platforms to deepen competitive moats.

• SEA Architecture: The Sustainable Experience Architecture remains the bedrock. The integration ensures that all future Zeekr and Lynk & Co models utilize the latest iteration of SEA (likely incorporating 800V capabilities as standard).
• Autonomous Driving (AD): Internal memos from Chairman Li Shufu highlight a "double down" strategy on full-stack AD development. Privatization allows Zeekr to invest heavily in proprietary silicon and algorithm training without needing to show immediate ROI to public shareholders.

Global Market Strategy: The Pivot to "Friendlier Shores"

With the US market closed and Europe hostile, Zeekr’s global strategy is undergoing a significant pivot. The goal of reaching 50 export markets by 2026 remains, but the geographic mix is shifting.

The "Global South" Strategy

Sales data indicates a surge in exports to Southeast Asia and the Middle East, regions that have not imposed punitive tariffs on Chinese EVs.

• Southeast Asia: Leveraging Geely’s ownership of Proton (Malaysia), Zeekr can utilize local manufacturing and distribution networks to penetrate the ASEAN market, which is rapidly electrifying.
• Middle East: High demand for premium, tech-forward vehicles in markets like UAE and Saudi Arabia aligns perfectly with Zeekr’s product profile.

The European "Trojan Horse" Strategy

Despite the 45.3% tariff, Europe remains critical. The integration of Zeekr and Lynk & Co is vital here. Lynk & Co already has a foothold in Europe through its subscription model.

• Leveraging Volvo: Zeekr plans to pair its European homologation know-how with Volvo’s deep local after-sales backbone. This addresses the primary consumer hesitation regarding Chinese brands: service and parts availability. By using Volvo dealerships for service, Zeekr can offer a "European-grade" ownership experience that rivals cannot match.

Capital Market Implications and Outlook

The privatization of Zeekr is likely a temporary retreat from public markets, setting the stage for a future capital event that is better aligned with the company's maturity and geopolitical reality.

Impact on Geely Auto (0175.HK)

For Geely Auto shareholders, the transaction is accretive. Analysts note that Geely Auto, trading at ~9.26x PE, was undervalued relative to the growth potential it now fully owns. Consolidating Zeekr eliminates the minority interest leakage, allowing Geely Auto to report higher consolidated earnings once Zeekr crosses the profitability threshold.

The "Homecoming" Listing Thesis

Market consensus suggests that Zeekr will eventually re-list, likely on the Hong Kong Stock Exchange (as a primary listing) or the Shanghai STAR Market (A-shares).

• Valuation Arbitrage: A-share markets typically assign significantly higher valuation multiples to technology manufacturing champions than US markets. A re-listing in Shanghai in 2027 or 2028, once the company is profitable, could value Zeekr at 2-3x the privatization price.
• Timeline: Regulatory experts suggest that the "clean up" of the shareholder register and the integration with Lynk & Co will take 12-24 months. A relisting is unlikely before 2027.

Implications for Peers (Nio, Xpeng)

Zeekr’s exit puts immense pressure on standalone peers like Nio (NYSE: NIO) and Xpeng (NYSE: XPEV). Unlike Zeekr, they do not have a profitable, cash-rich parent company to take them private. They remain exposed to the volatility of US capital markets and the threat of the "1260H" list. Zeekr’s move may force these competitors to accelerate their own dual-listing plans or seek mergers with state-owned enterprises to survive the "deep water" phase of the industry consolidation.

Conclusion

The privatization of Zeekr Intelligent Technology is a masterclass in strategic maneuvering by the Geely Holding Group. Faced with a hostile external environment (trade wars, tariffs) and internal inefficiencies (brand cannibalization), Chairman Li Shufu executed a decisive pivot. By absorbing Zeekr back into the private domain, Geely has prioritized control over vanity, profitability over growth, and integration over expansion.

This transaction signifies the end of the "wild west" era of Chinese EV financing. The future belongs to integrated giants capable of leveraging global supply chains, massive economies of scale, and proprietary technology stacks to survive the coming war of attrition. Zeekr, now fortified within the Geely fortress, is better positioned to be one of the few survivors.

Sources

• Zeekr Intelligent Technology Investor Relations - Zeekr Group Announces Completion of Merger Official press release regarding the completion of the merger with Keystone Mergersub Limited and subsequent NYSE delisting (December 22, 2025)
• Geely Automobile Holdings Limited - Geely Automobile Holdings Limited to Terminate its US Reporting Obligations Official announcement regarding the termination of US reporting obligations with the SEC following the privatization of Zeekr (December 22, 2025)
• Hong Kong Exchanges and Clearing Limited (HKEX) - Joint Announcement: Proposal for the Privatisation of ZEEKR Official regulatory filing detailing the Merger Agreement, consideration options (Cash vs. Share), and shareholder voting results (July 15, 2025)
• U.S. Securities and Exchange Commission (SEC) - Zeekr Intelligent Technology Holding Limited: Form 6-K Filing of the Agreement and Plan of Merger and related transaction documents (July 15, 2025)
• Zeekr Intelligent Technology Investor Relations - Zeekr Group Reports Third Quarter 2025 Unaudited Financial Results Official financial report providing data on revenue, gross margins, and vehicle deliveries for the quarter ended September 30, 2025 (November 17, 2025)
• Zhejiang Geely Holding Group - Geely Holding Outlook 2025 Corporate news release outlining the 2025 sales targets for Zeekr (320,000 units) and Lynk & Co (390,000 units) and the "One Geely" strategy (January 8, 2025)