EU approves Geely Volvo purchase

The takeover of Sweden's Volvo Cars by Chinese carmaker Zhejiang Geely Holding and the a regional state investment fund based in the Chinese petroleum city of Daqing was cleared by the European Union's competition watchdog on Tuesday.

EU approves Geely Volvo purchase

The European Commission said the transaction “would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.”

The commission found that the overlap between Geely and Volvo was “very limited” since the Chinese company “has almost no passenger car sales in Europe.

“Furthermore, Volvo’s very limited presence in the field of supply of diverse car components would not allow the merged entity to close off other market players,” the commission said in a statement.

The European body also noted that the sole business of the regional state fund “is the investment and management of state-owned assets.”

Geely sealed a deal worth 1.8 billion dollars in March to buy loss-making Volvo from Ford Motor of the US.

Geely has said it had plans to expand Volvo’s presence in China, now the world’s largest car market.

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China offers Volvo millions new loan deal

Car maker Volvo, the Swedish subsidiary of China's Geely Group, announced on Monday it had signed a second loan agreement with the China Development Bank as it aims to boost sales in the Chinese market.

China offers Volvo millions new loan deal
The $800 million loan, with a maturity in 2021, "will support Volvo Car Group in further developing its product programme as well as strengthening the capital structure over the coming years," the company said in a press release.
The previous $922 million loan from the state-owned bank helped the firm pay back in advance another loan with the European Investment Bank.
Volvo, which has sustained losses since 2011, has high hopes for the Chinese market.
The company is about to start production in its second and third Chinese factories, and the Asian country will soon become Volvo's largest national market ahead of the United States, where sales are dropping.
China Development Bank is the first creditor of the company, which on June 30th this year had an approximate total debt of 9.5 billion kronor ($1.44 billion) with financial institutions.
Volvo was purchased by Geely in 2010 and hopes to double sales in the Chinese market by 2020. China has been Volvo's largest market for the past two months.