Geely expects third quarter Volvo deal

China's Zhejiang Geely Holding expects to complete the purchase of Sweden's Volvo Cars in the third quarter, the firm said Thursday after the European Commission cleared the takeover earlier this week.

Geely expects third quarter Volvo deal

“We feel very relieved at the approval,” Geely said in a statement, adding the transaction should be completed by the end of September.

Geely, which acquired Volvo in March, has said it will spend $2.7 billion on the deal, which includes the original price tag of $1.8 billion plus $900 million in working capital to improve the brand.

The European Union’s competition watchdog on Tuesday cleared the takeover of Volvo Cars by Geely and the regional investment fund Daqing.

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

The Chinese company acquired the loss-making Swedish brand – known for its sturdy family-friendly vehicles – from Ford Motor Co., which had owned it for

a decade.

Geely has become one of China’s largest private car makers since launching its auto manufacturing business in 1997. It has an annual production capacity of 300,000 cars, but has sold less than 200,000 units abroad since 1997.

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Sweden’s Volvo Cars may merge with Chinese owner Geely

Sweden's Volvo Cars and its Chinese owner Geely announced on Monday that they are considering merging into a single group in order to share resources, but would preserve their separate brands.

Sweden's Volvo Cars may merge with Chinese owner Geely
File photo of a Volvo test-drive. Photo: Christine Olsson / TT

The merged firm “would have the scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry,” they said in a statement.

“The combination would preserve the distinct identity of each of the brands Volvo, Geely, Lynk & Co and Polestar,” they added.

Geely bought Volvo in 2010 from Ford which hadn't been able to turn around the Swedish automaker. But under the Chinese firm Volvo has rebounded and smashed its sales records.

Volvo sold more than 705,000 vehicles in 2019, besting the record it set in 2018 by 10 percent, and the automaker expects continued growth this year.

The statement said the firms would create a joint working group to prepare a proposal for the boards of both firms.

“A combined company would have access to the global capital market through Hong Kong and with the intention to subsequently list in Stockholm as well,” it added.

Volvo put off a share listing in 2018 due to tensions in global markets.