Geely may have officially inked a deal to purchase Volvo Cars from Ford back in March, but it still faced several hurdles before it could officially take ownership of the firm. Thankfully, the company recently cleared its largest obstacle: The European Union has approved the transaction.
Per the EU’s anti-monopoly regulations, a commission needed to investigate the sale to ensure no monopolization of the European car market would occur as a result of Geely’s purchase. Unsurprisingly, the EU commission and competition regulators found Geely’s acquisition of Volvo does not significantly impede competition in Europe, and signed off on the deal.
It appears Geely is in the clear within its home country to purchase the Swedish automaker. Because Geely is already an established automaker within China, it doesn’t need to seek government approval to branch into a new line of industry. Such approval was sought by Tengzhong when it tried to purchase Hummer from General Motors, but since the green light was never awarded, the deal — and the brand itself — vaporized into thin air.
Volvo had been on the market for quite some time and reportedly had several suitors, but Ford announced Geely was its preferred bidder back in October 2009. Since then, negotiations escalated, and the official $1.8-billion takeover agreement was signed in March 2010.
Geely and Ford are expected to complete the transaction by the third quarter of this year. It’s a significant purchase, as it allows Geely to have access to engineering and R&D resources, while providing Volvo extra production capacity and access to the increasingly competitive Chinese auto market.
Will a Chinese-owned Volvo brand succeed? If the all-new 2011 S60 is any indication, Volvo’s future may be quite bright. What are your expectations of the marriage? What new Volvo offerings would you like Geely to send our way in the near future?
Source: Automotive News (Subscription required)