Geely seals US$1.5b buyout of Volvo
By Vivian Jin |
August 3, 2010, Tuesday
|
Print Edition
Print Edition
GEELY Holding Group yesterday said it has completed its purchase of Volvo Car Corp from Ford Motor Co, sealing the biggest overseas acquisition in China's car industry.
The final deal is valued at around US$1.5 billion, including US$1.3 billion paid in cash, which is lower than an earlier price of US$1.8 billion when the agreement was signed in March. A handover ceremony was held in London yesterday after the deal won approval from regulators in China, the United States and the European Union.
Privately owned Geely yesterday also announced the appointment of six members to the Volvo board, including Stefan Jacoby, president and chief executive of the new Volvo Car Corp. Its target for Volvo this year is to turn a profit.
Geely Chairman Li Shufu said: "Volvo enjoys a much better position in the global market given its quality, technology, research and development abilities and its brand value.
"We would continue to strengthen its presence in Europe and North America while also taking advantage of growth opportunities in China."
Dong Yang, Executive Vice President of the China Association of Automobile Manufacturers, said Geely's successful takeover of Volvo is "just the company's first step in expanding."
Keeping Volvo's high-end brand value and product quality will be a difficult task, Dong said, adding that raising the brand's market share and adapting it to Chinese conditions will not be easy.
Jia Xinguang, an independent auto analyst, suggested Geely should make full use of Volvo's resources including intellectual property rights and brand recognition.
"As a late market comer to China, Volvo's localized production would also be important or it will miss the opportunity again," Jia noted.
Besides two plants in Swedan and Belgium, possible production in China is yet to be decided.
The final deal is valued at around US$1.5 billion, including US$1.3 billion paid in cash, which is lower than an earlier price of US$1.8 billion when the agreement was signed in March. A handover ceremony was held in London yesterday after the deal won approval from regulators in China, the United States and the European Union.
Privately owned Geely yesterday also announced the appointment of six members to the Volvo board, including Stefan Jacoby, president and chief executive of the new Volvo Car Corp. Its target for Volvo this year is to turn a profit.
Geely Chairman Li Shufu said: "Volvo enjoys a much better position in the global market given its quality, technology, research and development abilities and its brand value.
"We would continue to strengthen its presence in Europe and North America while also taking advantage of growth opportunities in China."
Dong Yang, Executive Vice President of the China Association of Automobile Manufacturers, said Geely's successful takeover of Volvo is "just the company's first step in expanding."
Keeping Volvo's high-end brand value and product quality will be a difficult task, Dong said, adding that raising the brand's market share and adapting it to Chinese conditions will not be easy.
Jia Xinguang, an independent auto analyst, suggested Geely should make full use of Volvo's resources including intellectual property rights and brand recognition.
"As a late market comer to China, Volvo's localized production would also be important or it will miss the opportunity again," Jia noted.
Besides two plants in Swedan and Belgium, possible production in China is yet to be decided.
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