Geely Automobile is on track to secure outbound direct investment (ODI) clearances for its proposed privatisation of NYSE-listed ZEEKR Intelligent Technology (Zeekr), two sources familiar with the matter said.

Announced on 15 July, the proposed USD 2.4bn transaction requires regulatory approvals from various Chinese authorities, including the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM), according to Geely’s stock filing and Zeekr’s proxy statement. Geely said in a 15 September update that it would “continue working towards fulfilling the conditions.”

The ODI process is not expected to pose a major hurdle, one source said, adding that approval is “only a matter of time.” The procedures are taking longer mainly because multiple agencies, including the NDRC, MOFCOM, and the State Administration of Foreign Exchange (SAFE), have their own review requirements, the source explained. The deal’s size also adds to the complexity. If all Zeekr’s shareholders opt for cash, the total cash consideration payable will be USD 2.4bn.

It is currently normal for ODI reviews to take three to six months to complete, the source noted.

A lawyer familiar with the process said outbound investment into the US could face some delay. Although Zeekr is Cayman-incorporated, the relevant reviews will look at the de facto ODI destination, which is the US in this case. The restrictive policy on US-related ODI could ease following the new trade framework recently agreed between Chinese and US leaders in South Korea, the lawyer added.

A source familiar with Chinese government thinking said Beijing generally warns investors of potential risks when it comes to US-related investments. However, privatisations of US-listed Chinese companies that delist from the US market and later list in Hong Kong, such as the Zeekr/Geely transaction, are generally encouraged.

Zeekr’s proxy also mentioned that both Geely and Zeekr will need to make filings with the China Securities Regulatory Commission (CSRC). Geely must submit ex-post filings in relation to the issuance of new shares to Zeekr shareholders choosing share consideration, while Zeekr must submit ex-post filings regarding its delisting, the source explained.

The proxy did not mention an approval from China’s State Administration for Market Regulation (SAMR). The transaction does not involve a transfer of control as Geely already owns 65.2% shares in Zeekr.

Shareholders’ ODI obligations

According to Zeekr’s proxy, investors electing to receive Geely shares and subject to ODI rules must complete relevant filings before the election deadline. These investors would typically need to file a modification with MOFCOM, the lawyer said.

For shareholders holding Zeekr through an approved ODI structure, material changes such as a share swap, sale, or merger would normally trigger a modification or termination of the existing MOFCOM ODI registration, the lawyer added.

The deal has an outside date on 31 December 2025, which can be further extended by 90 days if the only outstanding conditions are HKEX approval, Geely’s ODI approvals, and filings required under state securities laws in certain states in the US.

Geely and Zeekr did not respond to a request for comment. NDRC and MOFCOM do not comment on ongoing deals.