China's Geely Has "Money in the Bank" Now for Volvo
By Michelle Krebs March 10, 2010Chinese automaker Geely reportedly has obtained financing for its long-planned purchase of
Sweden's Volvo Cars from Ford Motor Co.,
The financing was concluded in recent days and the money is now in Geely's bank account, according to a report from the Swedish financial daily Dagens Industri, which was picked up by worldwide wire services. Geely reportedly will pay about $2 billion for Volvo.
Possibly lengthy approvals from various Chinese, Swedish and U.S. authorities is still required and could mean a few more months before the deal is finished.
Geely reportedly plans to keep Volvo production in Sweden, although local trade unions are concerned production could eventually move to China. Volvo employs 22,000 people globally; 16,000 of those are in Sweden.
Geely has said it plans to nearly double Volvo's annual global production with a new factory in Beijing, which would make the automaker profitable by 2011.
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Geely has a lot to gain from this acquisition. After purchasing an Australian transmission company and working out a deal with the owners of Seat to distribute in Europe, buying Volvo gives Geely a technological boost and a distribution network in the US. Geely is especially well-suited because they're the only privately owned Chinese company; no government intervention.
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