Geely's Volvo procurement almost finalized

• Source: xinhua
• [08:16 August 13 2009]
• Comments

Geely's procurement of Swedish auto giant Volvo is approaching the final stage, the National Business Daily learned from Sweden. Volvo and its owner Ford Motor Company are expected to make the final approval as early as this month.

In addition to Geely, which will get the majority of Ford's stake in Volvo, a Swedish company will also acquire the remaining shares. Meanwhile, Ford will keep 10-15 percent of its presence in Volvo for the following 7-8 years, in order to facilitate the launch of new Volvo models.

Ford plans to sell Volvo at around 20 to 25 billion Swedish Kronas (2.528 billion dollars to 3.159 billion dollars), of which Geely will pay 15.6 billion Swedish Kronas.

Previously, the Volvo Engineers Union had expressed dissent about the deal and wished for a European owner instead of Chinese Geely, an opinion also shared by higher officials in the Swedish government. However, Ford's "package sale," which involves a local Swedish company, greatly eased the dissent.

Some experts told the National Business Daily yesterday that Geely's boss, Li Shufu, will not merge the two companies, but will keep Volvo's operation independent.

Regarding Volvo's XC90 manufacturing site in China, insiders from Geely mentioned that both Dong Guan in Guangdong Province and Tianjin Municipality are likely places. However, rumours spread earlier this month saying Beijing and Bazhou in Hebei Province may also be the host for the Swedish vehicles.