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Chinese state investor gets 40 percent of Volvo

Chinese state investor gets 40 percent of Volvo

Published: 24 Jun 2010 11:50 GMT+02:00
Updated: 24 Jun 2010 11:50 GMT+02:00

It is regional state fund based in the northern Chinese petroleum city of Daqing, which participated in the purchase with Volvo parent Geely Automotive, also from China. With the deal, the investor will become a large minority shareholder, owning about 40 percent of Volvo Cars, according to TV4 data.

"The regional state fund is Geely's external financial partner," Anders Fogel, Geely's spokesman in Sweden, told newspapers Dagens Industri, AFP reported. "We can't immediately say what percentages the partners will have in Volvo Cars," he added.

Olle Axelson, director of communications at Volvo Cars, is positive that a strong backer for the company is coming in.

"This signifies financial security for the deal," he told news agency TT, referring to the deal Geely inked with Ford to acquire Volvo Cars for $1.8 billion on March 28th, almost four times less than what it had paid for the brand 11 years earlier.

According to Dagens Industri, quoting sources close to the deal, the purchase will be finalised in August, AFP reported. Geely has previously promised that no Swedish jobs will end up in China and that research and development would remain in Sweden.

When asked if he trusted Geely to keep its promises, Axelson said, "Of course, this has been clearly expressed to employees. One cannot move a car factory because it is such a regulated operation with thousands of subcontractors in many segments."

Geely's owners have previously said that they will open a production plant in China. It also plans to expand Volvo's presence in China, now the world's largest car market.

According to TV4, the state fund has imposed a requirement on the deal, allowing it to influence where the Chinese factory will be built.

"I do not know how this relationship works," said Axelson in refernece to the kind of demands it can make as a major shareholder. "However, a plant cannot be built anywhere without it being in the right place logistically. There are many parameters that govern the decision."

TT/AFP/The Local (news@thelocal.se)

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Your comments about this article

15:49 June 24, 2010 by Thebinary1
Surprise surprise ...

Buy a Volvo and financially sponsor the Chinese Government in supressing Tibetan rights, etc...

Or dump Volvo cars en masse and kill 31,00 Swedish jobs ....

Hmmm ..... *difficult* decision....
19:22 June 24, 2010 by qya
This news is too much bullshit! Daqing is not a company! It's a city in the north of China! Three months ago I have already got the new from Chinese media that half of the money using for purchasing Volvo is borrowed from State Assets Administration Committee of Daqing. It's "borrowed". It means the biggest holder is Geely, but Geely has some relation with the government.
10:33 June 25, 2010 by bjinger
To thebinary1:

Tietbet under Dalai Lama before 1950 was a slavery region, that means the general public are nothing but slaves. I don't know if you are talking about is the Tiebet under Dalai Lama?

In my eye, your information is worthless.
12:41 June 25, 2010 by Thebinary1
@bjinger

The level of your ignorance is spectacular. If you actually did a thorough research yourself as opposed to eating what comes out of the asses of the Chinese Government, you would discover that your conclusion is incorrect.

But okay, you have your views and I have mine. And lets accept that.

But now I ask you: What if you are wrong? What are the consequences of you being wrong? What if the Dalai Lama was in fact the liberator of Tibet and the Chinese being the opressors currently enslaving the Tibetan population?

And in my case: If I am am wrong, what are the consequences? Well, I can answer that now because if I am actually wrong and the Dalai Lama is an opressor and the Chinese "liberated" Tibet in the 50s, then the 74 year old man - will die as a failed dictator. Nothing more.

You do your research more thoroughly, that is all that can be asked of any Chinese citizen. Refusing to use the kind of informational priviledge presently at your fingertips and being complacent to a tragic cultural genocidal outcome is beyond idiocy. Its inhuman - the very kind of thing that goes against your existence in this present moment.
13:13 June 25, 2010 by qya
It's meaningless to make any comment about China before you can distinguish a Chinese city form a Chinese company. There're already too many senseless arguments on The Locial.
20:30 June 25, 2010 by SWOT
when you talk about Tibet, have you ever been there? or have you ever been to China? if you have not seen anything yourself. Please go there and have a look, then you can talk about the truth.

I am a Chinese, the only thing I can see from Tibet policy is the stupid Chinese government is using the our money to provide supplies for the Tibetians. The Chinese government is trying to gain control from that region and keep the current border. However, it neither voted nor permitted by the majority of Chinese. The government is feeding the laziest people like how Swedish control the Soumi and keep the land in the north. I hate that, whatever it happens in Sweden or in China. However, it is not true that, the Tibetians are living in a inhuman life.
22:52 June 26, 2010 by samwise
hey qya, where does it say "Daqing is a company"?
23:14 June 26, 2010 by qya
Congratulations! It seems that The Local has found the mistake and changed "a company Daqing" to "northern Chinese petroleum city of Daqing".
23:14 June 26, 2010 by samwise
hey SWOT, I have lived in china for years, does that make what I say about china automatically credible? not necessarily. Does a german really understand the state of the country in 1939? does a russian really understand the soviet unions in 1965? you know what, it;s not just about the understanding of things, also about the facts.

by the way, there is something called human dignity, prohibiting people from practicing what they believe does not enrich that, you know.

can you access the real unfiltered internet in china like in sweden? no you can't. why is that ?
02:32 June 27, 2010 by swedese
Hey samwise, everybody belives he knows the fact. who knows which one more close the fact? only God. for example, when you are very hungry, there are two choices for you: one is pizza and filtered internet, other is water and unfiltered internet. which one you are choice? please take a look on their dinner table then you blame them filtering the internet.
15:31 June 27, 2010 by samwise
hey swedese, are you suggesting that filtering the internet somehow improves the productivity of pizza, or produces a pizza? tell me why that is. I don't see why those two things have to go together.

you didn't argue the fact that the commies filter the internet, that's good.
20:20 June 27, 2010 by swedese
to samwise:

unfiltering internet-- appear the opinion to against commies -- commies step down -- chinese civil war -- the people in the lowest rung die or miserably poor -- no pizza or bread.

this scenario have been preformed almost 2 thousands years in china. in the most time the unfilter internet instead by slogans.
00:11 June 28, 2010 by samwise
now you start suggesting chinese are like a different species, that everything becomes chaotic once the internet is not filtered over there. I don't think that's true though, taiwanese can probably give you an example.

i've heard your theory somewhere, oh I remember, from the commies, for decades.

are chinese people really that crazy and stupid that the only thing they can come up with when the internet is not filtered is self destruction? will you do that yourself?
19:07 July 1, 2010 by Philip21
What rubbish we are being fed.....

In the past week we have seen the new CEO from VW arrive on site at Volvo and then all Press Releases about the new CEO get cancelled, because Geely cannot even calculate notice periods and work out that VW will not just roll-over and let their man go.

Now that August 2nd is looming, it's obvious that without any of the current management contracted to stay, and the new CEO unable to start, that it's a disaster....

Chairman Li must be the worst informed and most ill- advised person in the car industry, run a close second by the Swedish Politicians who expect to go to China and see a joined up plan that they can trust.
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