Geely signs up with Johnson controls

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According to Reuters:

SHANGHAI, Dec 17 (Reuters) – Zhejiang Geely Holding Group, a preferred bidder for Ford Motor’s (F.N) Volvo car unit, said on Thursday it had signed up Johnson Controls (JCI.N) as its global auto parts supplier.

Under the agreement, the two sides will also cooperate in the clean energy sector, it said in a statement, without elaborating.

Over the past three years, Geely, mostly a low-price player has dropped 385 companies from its pool of suppliers as it moved to raise its profile, it said.

It aims to strengthen its supplier network with 40 core suppliers in the next 3 years, the statement added.

Sources told Reuters on Wednesday that Geely, parent of Geely Automobile Holdings (0175.HK), aims to complete its acquisition of Volvo in early 2010 and has hired big-name consultants, including Roland Berger Strategy Consultants, to help streamline its operations. [ID:nTOE58F03S]

The Volvo deal is also backed by Beijing, which has been encouraging cross-border acquisitions by China Inc, amid a global recession.

“Our policy is to provide support to Chinese firms seeking overseas mergers and acquisitions,” Yao Jian, a spokesman of China’s commerce ministry, told reporters on Wednesay.

At least three major Chinese banks, including Bank of China (3988.HK) (601988.SS), China Construction Bank (0939.HK) (601939.SS) and Export-Import Bank of China, had agreed to extend loans to Geely for the Volvo deal, sources said earlier this month