The company bought its stake from Cevian Capital and, once regulatory approval is granted, will have 15.6 per cent of voting rights – short of the 22.8 per cent voting stake belonging to Swedish investment firm Industrivarden.
A Geely spokesperson told Reuters there are no plans to reunite Volvo Trucks and Volvo Cars. AB Volvo sold its car-making arm to Ford in 1999, which owned until post-Global Financial Crisis money troubles forced its sale to Geely in 2010.
"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," Li Shufu, Geely chairman, said in a statement.
"We will support the Board of Directors and the management of AB Volvo in their continued execution of the current strategy."
No financial details about the deal have been released, but Dagens Nyheter says the stake is worth €3.25 billion ($5 billion).
Christer Gardell, Cevian Capital co-founder, said the firm was approached by Geely, and has made around SEK20 billion ($3.1 billion) since it began investing in AB Volvo in 2006.
These new members of the family join Geely, The London Taxi Company, Lynk & Co, Volvo, and the newly-liberated Polestar brand as part of the Chinese automaker's stable of badges.