Geely Automobile 0175

[investar]

I am sure it is part of the deal to keep the current factories in Belgium and Sweden open. The governments of these countries are guaranteeing loans to Geely, but Geely has to keep producing Volvos in these plants. So the status of "worlds safest vehicle" is not threatened in my opinion.

According to this link, Volvo will probably become the official state car in China:
http://www.autoevolution.com/news/volvo ... 16867.html
This would confirm the approval and support of the Chinese government for Geely's controversial aim to become a global player.

Ford paid over 6B$ for Volvo a few years ago, so 2B seems like a good deal for Geely.

The Volvo electric car is already in a far stadium:
http://www.volvovine.com/march10/electric-c30.aspx
So Geely would also be ahead of the competition in China in this market.

I am convinced that the Volvo-Geely marriage is a win-winsituation for both companies, but I am not sure yet about the market's reaction. I do not think a Spyker scenario (shareprice *3 in a week, to retrace afterwards) is a realistic possibility, but surely a jump towards earlier highs at 4.84 should be possible.

[investar]

http://www.reuters.com/article/idCNTOE6 ... 317?rpc=44
http://www.chinadaily.com.cn/bizchina/2 ... 601440.htm

Because of these articles, Geely did not participate in the HK rally. But both parties confirmed that negotiations are progressing on schedule.
Would this be a tactic by the Chinese trying to stall, in order to shave a few hundred million off the price???

Ford shares were up almost 5% again, closed at a 5-year high... 52wk low 2$, now 14$!

I wonder if we will see the same kind of move for Geely.

5-6$ after official signing of the deal: too optimistic?

[winston]

China's Geely expects Volvo deal by month's end

China's Geely expects Volvo acquisition by month's end, as leader plans visit to Sweden

Zhejiang Geely Holding Group expects to wrap up talks on buying Ford Motor Co.'s Volvo car unit by the end of this month, a spokesman for the Chinese automaker said Tuesday.

"I cannot tell the exact date, but so far everything goes smoothly, and I think the contract will be signed in March," said Ren Daqing, a spokesman for Geely in Beijing.

Ren would not comment on reports that the deal will likely be announced during a visit by Chinese vice president Xi Jinping to Sweden. Xi is due to arrive in Sweden on Saturday after visits to Russia, Finland and Belarus.

Ford, which purchased the Swedish car maker in 1999 for $6.45 million, has said it expects the deal to be finished by the end of the first quarter.

The Dearborn, Michigan automaker has been trying to sell Volvo since late 2008 to focus its resources on managing its core Ford, Lincoln and Mercury brands.

One key hurdle for the sale has been organizing financing and government approvals, Ford has said. The two sides have been negotiating details for sharing technology, engineering and parts.

Geely, an independent automaker that has struggled to upgrade its image in overseas markets, has long coveted a stronger foothold in Europe.

But some analysts accuse the company of overreaching in its quest for expansion.

"Geely has promised to keep the Volvo factory and business teams in Sweden after the takeover, so it will face funding problems," said Zhang Xin, an analyst at Guotai Junan Securities in Beijing.

Having used the funding it raised to buy Volvo, Zhang said Geely may be short of funds to operate the company.

Source: AP News

[winston]

China VP due in Sweden as Volvo takeover nears

SHANGHAI (AFP) - – Chinese Vice President Xi Jinping is due in Sweden this weekend, amid signs that Chinese carmaker Geely could soon formally seal a deal to buy troubled Volvo from US auto giant Ford.

Xi, tipped in political circles to replace President Hu Jintao by 2013, is due to arrive in Stockholm on Saturday for a four-day visit, state Xinhua news agency reported.

The visit comes after the chairman of China's Zhejiang Geely Holding Group, Li Shufu, told the Wall Street Journal last week that he expected to complete the deal to acquire Volvo by the end of the month as planned.

But there were still unspecified problems at Ford holding up the definitive accord, Li said.

Geely spokesman Yuan Xiaolin told AFP on Friday that the company had no update on the deal's status.

Ford Motor Company announced in December that it had agreed on the main terms of the sale of its loss-making Swedish subsidiary Volvo Cars to Geely, one of China's largest private automakers, for a reported two billion dollars.

If completed, the deal will bring to an end Ford's decade-long association with the premium Swedish brand, known for its sturdy, family-friendly cars.

Ford had said it anticipated "a definitive sale agreement will be signed in the first quarter of 2010, subject to appropriate regulatory approvals".

Geely reportedly secured the financing needed for the purchase earlier this month.

Volvo has 22,000 employees worldwide, including 16,000 in Sweden. The deal with Geely has raised fears among Swedish trade union leaders of cuts at the firm.

http://sg.news.yahoo.com/afp/20100326/t ... 2e412.html

[winston]

Geely seals Volvo deal

Zhejiang Geely Holding Group, China's largest privately-run carmaker, agreed yesterday to buy Ford Motor's Volvo car unit for US$1.8 billion (HK$14.04 billion), the country's biggest overseas auto purchase.

The takeover underscores China's arrival as a major force in the global auto industry and ends nearly two years of talks with Geely over Volvo - the last sale from Ford's former premier group, which also held Aston Martin, Jaguar and Land Rover.

Geely said it has secured all the necessary financing to complete the deal and "significant working capital" to fund Volvo's business.

"Today represents a milestone in the history of Geely," Geely chairman Li Shufu said in Shanghai, adding that Volvo Cars will remain a separate firm with its own management team based in Sweden.

The deal, which both sides aim to close in the third quarter, will free up cash for the number two US automaker and enable it to focus on its core Ford brand.

Geely, parent of Geely Automobile Holdings (0175), was named by Ford as the preferred bidder for its loss-making Swedish unit in October.

The mainland carmaker, which clinched Volvo at a price tag well below the US$6.5 billion Ford paid for it in 1999, plans to keep the brand and operations in Sweden.

Geely chairman Li Shufu is already planning a factory in Beijing that will make 300,000 Volvo branded cars, or as many Volvos for China as are now made abroad for foreigners.

Made-in-China Volvos may also get a boost from Beijing's plan to support domestic brands and replace Volkswagen's Audi A6 as mainland state officials' car of choice.

China raced past the United States to become the world's top auto market last year, with sales surging 46 percent to a record 13.6 million units.

It is keen to move into Western markets but has so far lacked the technology and brand recognition to do so.

The Volvo deal should help Geely to get around some of those obstacles more quickly. REUTERS


http://www.thestandard.com.hk/news_deta ... 00329&fc=1

[investar]

4.16 +1.46%
Volume not too impressive.

hmm, disappointing first reaction.
I thought the world news releases were quite upbeat.
But analysts are a bit sceptical.
Maybe tomorrow will be better...

[kennynah]

this is an announcement of an already well known fact.... i believe perhaps earlier price movement might have already captured this anticipated done deal... i may not surprise me that subsequently, price falls...

[investar]

a well known fact: i agree, in the current investment community. Even on the price of 1.8B there was not too much uncertainty anymore.
I was thinking (an putting my money on it that) there would be an effect of new investors coming in, who did not even know the name Geely before yesterday...
It looks like you are right about the buy the rumor, sell the news phenomenon.
But then, if I look at Ford and its jump, I find arguments again to believe that Geely could be heading for that 52-wk high of 4.84$.
I am still holding.

[kennynah]

best of luck !!!

[winston]

US$12b being spent on official cars in 2008. There goes the Audis ...

Volvo Seeks to Wean China Officials From Audis to Boost Sales

March 30 (Bloomberg) -- Zhejiang Geely Holding Co., having won backing from Chinese officials to buy Volvo Car Corp., will now seek to wean bureaucrats from Audi AG sedans to make the deal a success.

Geely intends to boost Volvo sales in China, the world’s largest auto market, ninefold to 200,000 a year within five years, Chairman Li Shufu said on March 28, after the company agreed to buy Volvo from Ford Motor Co. for $1.8 billion. A key market may be the Chinese government, which spent 80 billion yuan ($12 billion) on official vehicles in 2008.

http://www.bloomberg.com/apps/news?pid= ... m6z21lJHmQ