Volvo & saab belong to Chinese automakers

Geely almost finished the acquisition deal of Swedish automaker Volvo by December 23. BAIC has bought assets of Saab. Although the methods are different, those two acquisition deals solidify the foundation for Chinese automakers to develop business in the international market, according to the Yangzi Evening News.

　　Geely decided to purchase Volvo in the spring of 2010

Before Christmas Geely made significant progress in the acquisition deal with Volvo. On December the two companies issued a statement that Geely and Ford had agreed on all the important commercial terms related to the acquisition project of Volvo. Geely is expected to sign with Ford in the first quarter of 2010 about the transaction of shares. The whole project is expected to be finished in the second quarter.

It is reported that Ford is expected to sign the stock purchase agreement with Geely in the first quarter of 2010. When the relevant authorities approve the deal, the two sides will complete the transaction in the second quarter, according to the Yangzi Evening News.

　　There is no obstacle about the acquisition deal

Geely said there was no obstacle in the acquisition project. Now Geely has to wait the policy coordination and approval of Chinese and Swedish governments. It is understood that Geely has carried out a series of constructive meetings with Volvo's management, union representatives, as well as Swedish and Belgian government officials. Volvo's major plants are located in Belgium and Sweden.

　　The transaction price remains secret

How much did Geely pay for purchasing Volvo? Up to now both Geely and Ford have not disclosed the transaction price. According to some sources, the transaction price is close to two billion dollars. Ford Motor Co. bought Volvo in 1999 with the cost of 6.45 billion U.S. dollars. No matter how much the final price is, two billion is not a small sum for Geely Automobile. It is reported that Geely has gained support from Chinese banks and will obtain funding from three banks.

　　Plant may be established in Beijing

After completing the acquisition deal of Volvo, Geely will build factory for Volvo. It is likely that the plant will be built in Beijing. Some reports said that the production base would be built in the Beijing Economic-Technological Development Area. Beijing Municipal Government and Geely would invest 1.9 billion U.S. dollars for the establishment of plant. Relevant sources said the project had not yet been finalized and a number of specific details were still being negotiated by the two sides.

　　Volvo will operate its brand independently

Volvo will be under the leadership of an independent management team to maintain full independence and the headquarters is still set up in Gothenburg, Sweden. Volvo's current plant, R & D center, union agreements and dealer network will be preserved. Relevant sources said that both Volvo and Geely would remain two independent brands after the acquisition deal. Geely is still Geely and so is Volvo. Geely will have two sets of management teams to serve different consumer groups.

　　BAIC used 200 million U.S. dollars to buy Saab's technology

BAIC signed contract with Swedish automaker Saab on December 23. Two sides announced that the purchase of Saab's intellectual property had been completed. BAIC obtained Saab’s intellectual property rights successfully with the cost of 200 million U.S. dollars.

Through the acquisition deal BAIC obtained a complete quality and manufacturing process system from Saab, including the intellectual property rights of three vehicle platforms, three models, two series of engines, four main engines, two transmissions. Besides those technologies, 9-3 sedan, 9-5 sedan, 9-5 sport sedan also belong to BAIC.

In addition, BAIC obtained the technical documentation (vehicle design specifications, parts subsystem design specifications, test verification and validation of standardized methods, analytical methods), manufacturing process and supplier management system. BAIC will fully absorb Saab's technology of vehicle platform and engine after purchasing the assets. BAIC will do the best to conduct the research and development work of three to four models and two to three turbo engines in the next three years. Those models and engines will cover every specific segment of high-class market and BAIC will become a strong competitor in the market. (Translator: Qinghua/Hanxin)

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