In the morning of January 11, Baidu and Geely Holding both issued announcements, officially proclaiming the establishment of a smart electric vehicle company. Baidu said that it would formally form a smart car company to enter the automotive industry as a vehicle manufacturer, with Geely Holdings as its strategic partner. The latter’s subsidiary Geely Automobile issued an announcement stating that it was not a party to the proposed transaction and has not cooperated with Geely Holdings or provided financing to it.
Geely Holding stated that the cooperation would base on Geely’s latest global leading pure electric architecture-SEA Haohan Intelligent Evolution Experience Architecture. The architecture is based on the cutting-edge technology of global intelligent electric vehicles, breaking through the boundaries of traditional car manufacturing. It is committed to building a future travel service system with infinite interaction and extension through the integration of hardware layer, system layer and ecological layer, providing users with continuously optimized personalized services and growing mobile life. The architecture will be open to its strategic partner.
It was reported that this was not the first cooperation between the two companies, which have previously carried out extensive cooperation in the fields of intelligent networking, intelligent driving, smart home, e-commerce and so on.
In fact, the share prices of the two companies have experienced a surge in the news of “co-building cars”.
On the evening of the 10th, Beijing time, Baidu’s stock price rose by 15.57% and its market value increased by 11 billion US dollars overnight, or about 70 billion yuan. The final stock price closed at 242 US dollars per share, and the market value also rose to US$80 billion after two years.
On January 8, Hong Kong stocks Geely Automobile rose by more than 20% in intraday trading, with its share price reaching 33.85 Hong Kong dollars, setting a new high, with the latest total market value of 326.8 billion Hong Kong dollars.
It is worth mentioning that on the morning of the 11th, Geely Automobile issued an announcement in response to the rumor that “Geely Holdings and Baidu Co-operate to Produce Smart Electric Vehicles” stated that the company was not a party to the proposed transaction, and that in terms of the proposed transaction, there was no cooperation with Geely Holdings or financing to it. Geely Automobile’s controlling shareholder is Geely Holdings.
The announcement stated that the board of directors, after making reasonable enquiries about the company under relevant circumstances, confirmed that it was not aware of any reason for the price changes of these shares, or any documents that must be published to avoid false markets in the company’s securities, nor any inside information.
However, Geely Automobile stated, “If the proposed transaction is implemented, while complying with the securities listing rules of The Stock Exchange of Hong Kong Limited and taking into account the overall interests of the company and its shareholders, the company does not rule out the possibility of seeking potential cooperation opportunities with Baidu.”
In addition, the announcement stated that since Geely Holdings was a major shareholder indirectly holding approximately 40.94% of the company’s issued share capital and an associate of the company’s executive director Mr. Li Shufu, Geely Holdings was the company’s associate in terms of the listing rules. Therefore, if any substantial or proposed cooperation between Baidu Company and the Company constituted a notifiable transaction and/or connected transaction, the Company would comply with the relevant listing rules to issue a separate announcement when necessary to provide relevant information to the market.