Geely gets second green light for Volvo purchase
TT/The Local · 30 Jul 2010, 10:41
Published: 30 Jul 2010 10:41 GMT+02:00
Zhejiang Geely Automobile has confirmed everything is ready for its purchase of Swedish automaker Volvo. Another state body, the National Development and Reform Commission (NDRC), approved the deal on Thursday after China's Ministry of Commerce gave it the green light on Monday, Dow Jones Newswires reported.
"We have received all necessary approval from the government," Ning Shuyong, spokesman for Zhejiang Geely, told Reuters on Thursday.
He added that the company is currently working to finalise the deal. The goal was to complete it by September, but it could be ready as early as next week. The two approvals from Chinese authorities do not change the schedule.
"We have no change of plans, but this is one of the milestones," Yuan Xiaolin, Geely's director of mergers and acquisitions, told news agency TT.
Anders Fogel, Geely Group's Swedish spokesperson, echoed the same positive tone.
"We can confirm that the Chinese governmental authorities have approved. However, what it means is that the deal will go according to plan and this is one of the components. We hope the close will continue to happen in the third quarter."
Stefan Elfström at Volvo Cars' information department told TT that the timetable is unchanged. He would not comment on the remaining details to finalise for the deal.
The purpose of the deal is so that Geely can start production of Volvo automobiles in China, the world's largest car market. Through such a move, Volvo would be able to almost double its capacity and break into the Chinese car market. Chairman Li Shufu will also lead the Swedish firm, the two groups said earlier this month.
Geely, which agreed to take over Volvo in March, has said it will spend $2.7 billion (19.57 billion kronor) on the deal -- the original price tag of $1.8 billion plus $900 million in working capital to improve the brand. The European Union's competition watchdog has already cleared the takeover.
Geely has become one of China's biggest private car makers since launching its auto manufacturing business in 1997. It has annual production capacity of 300,000 cars, but has sold fewer than 200,000 abroad since 1997.