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Geely wins EU OK to buy Volvo


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Geely wins EU OK to buy Volvo

Chinese automaker cleared to buy Ford's Swedish arm, giving it a foothold in Europe

The Detroit News

Brussels -- European Union regulators on Tuesday cleared Chinese carmaker Geely to buy Ford Motor Co.'s Swedish carmaker Volvo Cars.

The European Commission said it had no antitrust objections to Zhejiang Geely Holding Co.'s $1.8 billion purchase of Volvo Cars, based in Gothenburg.

Geely sells hardly any cars in Europe and Volvo has "very limited" operations as a car parts supplier, it said.

Geely's acquisition of Volvo has been heralded as a breakthrough deal for China's auto industry, giving one of its most ambitious automakers a prestigious global brand and access to top-tier technology.

The deal, expected to close next month, could give Geely a critical edge in China, the world's biggest auto market and one in which foreign brands often dominate. With Volvo, Geely also would gain a major foothold in Europe.

Geely, meaning "lucky" in Chinese, is a privately run company that has gradually built its business selling cars, motorcycles and scooters with little government support.

It teamed up with the Chinese state-owned investment firm Daqing to buy Volvo. It says it will spend an extra $900 million to expand production and make Volvo profitable again.

Ford has been trying to sell Volvo since late 2008 to focus on its core Ford, Lincoln and Mercury brands.

As Western automakers unload unprofitable assets, they are finding keen buyers in Asia.

Ford sold its Jaguar and Land Rover brands to India's Tata Motors Ltd. in June 2008 for $1.7 billion, a third of what it paid for them.

From The Detroit News: http://www.detnews.com/article/20100707/AUTO01/7070327/1148/auto01/Geely-wins-EU-OK-to-buy-Volvo#ixzz0t01uw7F8

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By Andrew Ganz

The European Union’s competition regulators have agreed to approve Ford’s plans to sell its Swedish Volvo unit to the combined interests of China’s Geely Automobile Holdings Limited and government-owned investment group Daqing.

The EU’s antitrust regulators say that the deal won’t “impede” competition in Europe’s crowded automotive marketplace.

The approval paves the way for Ford to close the Volvo deal on schedule in the third quarter of 2010. Geely’s holding group, which runs the Geely auto line in China, has agreed to pay $1.8 billion for Volvo and that it will invest a further $900 million into the automaker.

The deal includes access to Volvo’s technologies and its latest products, including the redesigned S60 that will go on sale later this year, as well as a number of models currently under development.



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