Geely to buy volvo

bengalraider

DFI Technocrat
Ambassador
Joined
Oct 10, 2009
Messages
3,778
Likes
2,585
Country flag
December 24, 2009
Ford Settles Terms in Deal to Sell Volvo

By DAVID JOLLY
PARIS — Ford Motor and Zhejiang Geely Holding Group said Wednesday that they had settled “all substantive commercial terms” on a sale of Volvo, clearing the way for the Chinese automaker to purchase Ford’s Swedish unit.

The U.S. automaker said that while final documentation, financing and government approvals remain to be completed, “Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals.”

The companies did not disclose a price. “That kind of detail will come when we have a definitive agreement,” said John Gardiner, a Ford spokesman in London.

Ford paid $6 billion in 1999 to buy Volvo; Geely is expected to pay around $2 billion.

Ford announced in October that it had selected Geely as the preferred bidder for Volvo over other contenders.

The joint announcement on Wednesday could ease Geely’s efforts to obtain the necessary approvals in Beijing. The Chinese government must give the green light for big overseas investments to go forward, Mr. Gardiner said.

Geely, based in Hangzhou, said in a statement that it “expects to sign a definitive stock purchase agreement with Ford in the first quarter of 2010.” The company is the largest private automaker in China.

A Volvo deal would mark one of the biggest moves yet by a Chinese car company in Europe or the United States. Beijing Automotive Industry Holding last week agreed to pay $200 million to acquire Saab Automotive carmaking technology from General Motors.

Ford, the only Detroit carmaker to avoid bankruptcy this year, is seeking to raise money as it refocuses on its “core” North American and European operations. It sold Aston Martin to a British-Kuwaiti consortium in 2007, and sold Land Rover and Jaguar to the Indian automaker Tata Motors in 2008. Ford last year also reduced its stake in Mazda Motor, the Japanese carmaker, to 13 percent from 33.4 percent.

Tata’s purchase of Jaguar and Land Rover, however, has turned out to be something of a cautionary tale. The companies continue to lose money and the debt Tata took on to buy them has been a drag on its earnings.

Tata has repaid the debt, but had to raise money by selling shares diluting the stake of existing shareholders, including the Tata Group. Analysts say Tata Motors will have to nurse Jaguar and Land Rover to health for some time to come.

Ford said it would continue to cooperate with Volvo, but it does not intend to retain a stake in the Swedish company.

Geely has sought to assuage anxiety about the deal in Sweden, saying it intends to maintain Volvo much as it is, including “an independent management” at its Goteborg headquarters.

“Geely is committed to working with all stakeholders to complete the transaction in the best interest of all parties,” Li Shufu, the chairman of Geely, said in a statement. The company said it has held “constructive meetings” in recent weeks with Volvo management, labor representatives and government officials in Sweden and Belgium.

Assuming the deal goes through, “Volvo will retain its leadership in safety and environmental technologies, and will be uniquely positioned as a world-leading premium brand to exploit opportunities in the fast-growing China market,” Geely said.

Meanwhile, General Motors is still working to dispose of its own Swedish carmaker, Saab. G.M. said last week that it would shut down Saab, which is based in Trollhattan, after negotiations to sell the company to Spyker Cars, a tiny Dutch automaker, fell through. G.M. said the sale of the older Saab technology to Beijing Automotive would not inhibit a sale.

Although G.M. has already begun the process of closing the company down, Spyker came back this week with a revised offer, and G.M. said it was studying that offer as well as other potential bids. While talks are continuing, analysts say Spyker’s bid appears to be a long shot.

Vikas Bajaj contributed reporting.

http://www.nytimes.com/2009/12/24/business/global/24auto.html?_r=1&pagewanted=print
@Mods please let this be an independent thread for the first three days then it can be merged with the general news thread.
 

redragon

Regular Member
Joined
Sep 20, 2009
Messages
934
Likes
38
@mods please let this be an independent thread for the first three days then it can be merged with the general news thread.
geely is screwed, and the gov of china will have to settle the lost by using money from average joes at the end. The developed countries will never sell anything useful to china.
 

Rage

DFI TEAM
Senior Member
Joined
Feb 23, 2009
Messages
5,419
Likes
985
Interestingly, this virulently pro-chinese website doesn't seem to think so:


Geely's Volvo bid not 'worth it'

By Li Fangfang (China Daily)
Updated: 2009-08-05 07:51





Geely Holdings Group's rumored bid to acquire Ford's luxury brand Volvo, analysts said yesterday, would not be in the best interests of the Chinese automaker.

"I am not optimistic about Geely's chances for Volvo. Is a small Chinese company capable of paying such a big sum for Volvo?" said Zhong Shi, an independent auto analyst based in Beijing.

Last year, Ford put a price tag of $6 billion for Volvo. Although the industry downturn has shrunk Volvo's value, analysts estimated the deal would still be worth between $1 billion and $1.5 billion at present.

Since Ford expressed its intention to sell Volvo's assets and brand worldwide earlier this April, a number of Chinese automakers, including Geely, Chang'an, Chery, Dongfeng, Beijing Automotive Industry Holding Corp (BAIC) and Guangzhou Auto, have been likely bidders.

"Since Ford is passing through a hard time, it won't sell Volvo at a relatively low price," said Zhong. "It's not worth it for Geely (which is on a high-speed development track in the domestic market) to pay billions of dollars for an ailing foreign auto brand."

Geely's total assets were at just over 14 billion yuan. It earned a profit of 1 billion yuan last year. Geely's Chairman Li Shufu admitted earlier this year that the company had about 10 billion yuan in debt.

"Although it will be a shortcut for Geely to foray into Western markets through the acquisition, the Chinese company still faces a series of big challenges," said Jia Xinguang, an auto analyst.

"Geely has to think over the possible troubles and bottlenecks in management, localization, employment and technology. Is it capable of solving all the questions?" Jia asked.

"Even Ford, the century-old US auto giant, could not manage Volvo profitably," added Zhong.

Meanwhile, a Beijing-based daily newspaper reported yesterday that Geely was considering purchasing land in the capital for a possible domestic manufacturing base for the Volvo.

"It may be a rumor again," said an auto analyst who declined to be named. "As BAIC is also a possible bidder for Volvo, the municipal government would not welcome a rival for the Beijing automaker. More important, can Geely swallow Volvo? It's a kind of Mission Impossible for Geely."

Fu Yuwu, secretary-general of the Society of Automotive Engineers, told China Daily earlier that Chinese automakers should focus on acquiring comparatively smaller foreign enterprises.

In March, Geely paid $56 million to purchase the Australian automatic transmission supplier Drivetrain Systems International (DSI), to boost its capability in automobile parts technologies.

"Geely did not pay very much for DSI. And it obtained the core technology of the transmissions supplier - a technology that's needed in China's auto industry - through this smart deal," Fu said.

"It's easier for Chinese automakers to deal with a low-profile foreign company."


Geely's Volvo bid not 'worth it'
 

redragon

Regular Member
Joined
Sep 20, 2009
Messages
934
Likes
38
Interestingly, this virulently pro-chinese website doesn't seem to think so:


Geely's Volvo bid not 'worth it'

By Li Fangfang (China Daily)
Updated: 2009-08-05 07:51





Geely Holdings Group's rumored bid to acquire Ford's luxury brand Volvo, analysts said yesterday, would not be in the best interests of the Chinese automaker.

"I am not optimistic about Geely's chances for Volvo. Is a small Chinese company capable of paying such a big sum for Volvo?" said Zhong Shi, an independent auto analyst based in Beijing.

Last year, Ford put a price tag of $6 billion for Volvo. Although the industry downturn has shrunk Volvo's value, analysts estimated the deal would still be worth between $1 billion and $1.5 billion at present.

Since Ford expressed its intention to sell Volvo's assets and brand worldwide earlier this April, a number of Chinese automakers, including Geely, Chang'an, Chery, Dongfeng, Beijing Automotive Industry Holding Corp (BAIC) and Guangzhou Auto, have been likely bidders.

"Since Ford is passing through a hard time, it won't sell Volvo at a relatively low price," said Zhong. "It's not worth it for Geely (which is on a high-speed development track in the domestic market) to pay billions of dollars for an ailing foreign auto brand."

Geely's total assets were at just over 14 billion yuan. It earned a profit of 1 billion yuan last year. Geely's Chairman Li Shufu admitted earlier this year that the company had about 10 billion yuan in debt.

"Although it will be a shortcut for Geely to foray into Western markets through the acquisition, the Chinese company still faces a series of big challenges," said Jia Xinguang, an auto analyst.

"Geely has to think over the possible troubles and bottlenecks in management, localization, employment and technology. Is it capable of solving all the questions?" Jia asked.

"Even Ford, the century-old US auto giant, could not manage Volvo profitably," added Zhong.

Meanwhile, a Beijing-based daily newspaper reported yesterday that Geely was considering purchasing land in the capital for a possible domestic manufacturing base for the Volvo.

"It may be a rumor again," said an auto analyst who declined to be named. "As BAIC is also a possible bidder for Volvo, the municipal government would not welcome a rival for the Beijing automaker. More important, can Geely swallow Volvo? It's a kind of Mission Impossible for Geely."

Fu Yuwu, secretary-general of the Society of Automotive Engineers, told China Daily earlier that Chinese automakers should focus on acquiring comparatively smaller foreign enterprises.

In March, Geely paid $56 million to purchase the Australian automatic transmission supplier Drivetrain Systems International (DSI), to boost its capability in automobile parts technologies.

"Geely did not pay very much for DSI. And it obtained the core technology of the transmissions supplier - a technology that's needed in China's auto industry - through this smart deal," Fu said.

"It's easier for Chinese automakers to deal with a low-profile foreign company."


Geely's Volvo bid not 'worth it'
I totally agree with the author, it's stupid to save western company
 

mattster

Respected Member
Senior Member
Joined
May 30, 2009
Messages
1,159
Likes
818
Country flag
Geely....what a stupid sounding chinese name for a car company.

If they are as dumb as their name, then they should buy Volvo.
 

redragon

Regular Member
Joined
Sep 20, 2009
Messages
934
Likes
38
It would be better to establish a company that will produce automobile indigeniously like Honda, toyota of Japan and Tata of India.
That is right, Geely is doing good in local maket, they are developing their own technology quite fast in the past several years, and China is the biggest market + biggest potential, so Geely should spend more resources thinking how to do better in Chinese market to serve Chinese
 

stax

Regular Member
Joined
Nov 22, 2009
Messages
25
Likes
0
Geely is a private-owned company and lack of technology. Volve's bus and car are really nice.
I believe Geely will reduce the cost of Vovle. I think this deal will benefit bilateral.
 

badguy2000

Respected Member
Senior Member
Joined
May 20, 2009
Messages
5,133
Likes
736
well, if Geely could buy up USA, I would not be oppose to it.
 

bengalraider

DFI Technocrat
Ambassador
Joined
Oct 10, 2009
Messages
3,778
Likes
2,585
Country flag
I for one would buy a chinese manufactured XC90 if they manage to keep the technology and quality intact,the lower labor costs should bring down the price by a third at least.
 

Known_Unknown

Devil's Advocate
Senior Member
Joined
Apr 21, 2009
Messages
2,632
Likes
1,669
I for one would buy a chinese manufactured XC90 if they manage to keep the technology and quality intact,the lower labor costs should bring down the price by a third at least.
I wouldn't. Geely is majority owned by the Chinese government. I wouldn't want my money going to the CCP.

However, it seems that the Chinese have finally woken up and are following in the footsteps of Indian corporations.
 

stax

Regular Member
Joined
Nov 22, 2009
Messages
25
Likes
0
I wouldn't. Geely is majority owned by the Chinese government. I wouldn't want my money going to the CCP.

However, it seems that the Chinese have finally woken up and are following in the footsteps of Indian corporations.
Totally wrong! Geely is a private-own Company!
 

badguy2000

Respected Member
Senior Member
Joined
May 20, 2009
Messages
5,133
Likes
736
I wouldn't. Geely is majority owned by the Chinese government. I wouldn't want my money going to the CCP.

However, it seems that the Chinese have finally woken up and are following in the footsteps of Indian corporations.
Geely is completey owned by private capital. it is a pure private company
 

stax

Regular Member
Joined
Nov 22, 2009
Messages
25
Likes
0
It would be better to establish a company that will produce automobile indigeniously like Honda, toyota of Japan and Tata of India.
Geely already make cars indigeniously, and most important it's a private-owned company, unlike other state-owned companies! Geely is the hope of China motor industry!
 

Global Defence

New threads

Articles

Top