The Chinese owner of Volvo Cars is to buy 8.2% of AB Volvo, manufacturer of Volvo trucks, which will make it the Swedish manufacturer’s largest individual shareholder.

Geely Holding said that the deal, currently subject to regulatory approval, will “strengthen the Volvo brand” with Geely’s own research and development in autonomous vehicles, electrification and vehicle connectivity.

Geely Holding will buy its stake in the manufacturer from investor Cevian Capital, in a deal which will give the business 15.6% of voting rights when complete.

Cevian had owned its stake in AB Volvo for more than 11 years, and co-founder Christer Gardell said “the agreement will not only give AB Volvo a new large and committed shareholder, but one with significant expertise in strategically important areas for future value-creation”.

While the parties declined to reveal the cost of the transaction, Swedish paper Dagens Nyheter cited estimated its value at €3.25bn (£2.9bn).

The Chinese group said it has no intentions of merging Volvo Cars with its commercial vehicle counterpart, but that its expertise in the Chinese market will enable growth at AB Volvo.

In a statement last week, Geely Holding’s chairman Li Shufu said: “We are delighted to have reached agreement with Cevian to acquire its holding in AB Volvo, making us the largest holder of share capital in a company that leads the world in many aspects of commercial vehicle development, manufacturing and sales.

“Given our experience with Volvo Car Group, we recognise and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo.

“We will support the Board of Directors and the management of AB Volvo in their continued execution of the current strategy.”

Based in Gothenburg, AB Volvo owns Dongfeng Commercials, one of China’s largest commercial vehicle manufacturers.

Geely Holding parent company Zhejiang Geely Holding holds shares in car manufacturer Lotus and owns the London Electric Vehicle Company, which builds the capital’s black cabs.