Geely feeling secure about Volvo purchase

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It was rumoured in early April that Geely were expecting to bid on Ford’s Volvo unit, but as time passed it looked Geely were the only company bidding for Volvo. In previous reports it looked like that a major stumbling block to Geely taking over Volvo weas the lack of access to Volvo’s IPR which was evidently going to be a problem for Geely as an upcoming car maker.

When the deal is eventually signed, Ford are not expected to keep any Volvo shares, but are expected to continue cooperating with Volvo in certain areas. An exact date for signing Volvo over has not yet been announced, but it is expected to happen before the start of 2010.

Seven Points
Geely have seven points that they refer to when planning to take over Volvo:

1. Geely has secured loans and funding from the Bank of China to initiate a buyout of Volvo

2. Geely plans to keep Volvo as an independent company, rather than merging it into Geely.

3. Allow Volvo to buy parts from China

4. Allow Volvo to continue with its current sales network set up in China

5.  Volvo keeps its current production set up, and self R&D ability

6. Volvo keeps its current contract with workers

7. Volvo keeps its international dealer network set up.

Ford have reportedly enlisted the services of JP Morgan and Citigroup to oversee the sale, whilst Geely have employed Rothschild to act as a consultant on their behalf.

The Volvo purchase by Geely still has to undergo a review by the Chinese Government, which is still a stumbling block for even Sichuan Tengzhong after the Hummer purchase.