Geely to offer $2 billion for Volvo; Chinese regulators question Hummer deal
07/20/2009, 12:18 PM
By Nick Aziz
China’s Geely Holding Group is expected to finalize a $2 billion offer this week to purchase Volvo from Ford, according to a new report. Meanwhile, Chinese regulators are said to be clashing over Tengzhong’s plan to acquire Hummer from General Motors.
The Volvo deal stems from a January 2007 discussion between Don Leclair, then Ford’s chief financial officer, and Geely chariman Li Shufu. A year later, Geely got serious about buying Volvo, but Ford decided it would try to restructure the company first. It wasn’t until early this year that Ford and Geely began to seriously discuss a sale.
Geely’s $2 billion offer will likely make it the top bidder for Volvo. A decision on the proposed sale could come in the next several weeks, according to the Wall Street Journal.
Mr. Li’s plan for Volvo, according to the report, is to slash the brand’s costs by taking advantage of lower product development and manufacturing costs available in China.
The proposed purchase of Hummer by Tengzhong is not going as smoothly. China’s economic planning regulator, the National Development and Reform Commission (NDRC), is said to be opposed to the purchase of the gas-guzzling Hummer brand. Meanwhile, the Ministry of Commerce (Mofcom) is more supportive of the plan.
The government of China’s Sichuan province, where Tengzhong is based, is lobbying the NDRC and Mofcom to approve the proposal, which GM has already accepted.
“If Tengzhong wants to set up a factory in China after acquiring the brand … this would require NDRC approval,” analyst Zhang Xin told Reuters. “But based on the current situation, this looks nearly impossible.”
07/20, 12:24 PM
posted by:
global_lightning
Well, there goes my resale value into the dirt…
07/20, 12:25 PM
posted by:
Madcapp
Can’t say much about Volvo, but anybody in their right mind would question the Hummer deal. That’s like buying a company that produces 8 tracks.
07/20, 12:25 PM
posted by:
carmaster4ever
they should of been bought buy koenigsegg like saab was! well good luck volvo! lol
they would of did find standing by themselves.. all this would not of happened if they didn’t allow the american automakers to buy them.
07/20, 12:39 PM
posted by:
Uncle Butch
I like da chinese food, my favorite is da egg rolls…
07/20, 12:41 PM
posted by:
Bankruptcy2009
Madcapp good analogy if there ever was one. At a time companies are dumping gas guzzlers left and right. I wonder what the chinese company sees in Hummer?? Volvo is a Good buy they are a technological powerhouse. Ford would be wise to keep them but then again. If Ford of Yore comes back meaning they come out with Great Product and then sit on their deriere’s for next 10 Damn years well good- then I hope they go out of business like they should instead of pimping the customer. But if Ford is serious about becoming the best then I think that will come in the next generation of vehicles after 2012 then 2014 then 2016 then 2018 then 2020. I am glad their getting rid of a good company that can only do better not only on their own but with any group that buys them!
07/20, 12:54 PM
posted by:
johnnycanuck
Take the money and run. Then use the proceeds to turn Mercury back into a real brand with an identity of its own. As much as I hate to say it but with GM’s apparent sincerity when it comes to the expansion of Buick Ford might be wise to have their own ‘middle’ brand.
07/20, 1:01 PM
posted by:
F50
I hope Fiat buys Volvo, like I said before if they couldn’t get Opel why not Volvo?
07/20, 1:16 PM
posted by:
Borat
Opel was selling in excess of 350K Astras in Europe alone in 2007-2008, FIAT is not looking for specialty manufacturer (they do own Alfa and Lancia for that, not to mention Maserati and Ferrari). I hoped for Renault/Nissan to bite, but Gnosn decided to cultivate Infinity for this segment in Europe. This basically spells kaput for Volvo.
Johnny, me think Mercury has reached Oldsmobile/Pontiac level of sophistication.
07/20, 1:17 PM
posted by:
Bankruptcy2009
Johnny Canuck if Mercury is to really survive it will be a miracle they need more than just a little money.
IN my lifetime the Best Vehicle other than the Great old Mercury Marquis Station wagons of the 1960’s was the 1967 Mercury Cougar was the best thing that ever happened to them. They would need a smash hit Mercury Cougar on Steroids to really get noticed as a viable name brand not just simply a reskinned Ford. I don’t know if the effort would not be better served to make Ford and Lincoln both World Class and World Class Luxury alike just the way Toyota and Lexus. Lets cut out the BS.. IF Ford could cut out the BS and have their cake and eat it two .,,and not be Mediocre…. has Never Shown itself. If they can’t the later is the best course of action Ford and Lincoln should go solo and do so World Class
07/20, 1:19 PM
posted by:
philjo1978
Don’t do it, Ford! Keep Volvo until the right buyer comes along.
07/20, 1:29 PM
posted by:
Uncle Butch
Da egg foo yung makes me gassy doh…
07/20, 1:31 PM
posted by:
Struggle
The end of the world is looming…..poor volvo.
07/20, 1:33 PM
posted by:
KarLoveBoy88
Geely? Ford seriously? They do better selling the Mercury brand. Atleast Volvo still sales and is considered a luxury vehicle.
07/20, 2:49 PM
posted by:
leftwingagenda
seems like a bad mix…volvo made their reputation on strong and safe vehicles, and as of late china’s reputation for product quality hasn’t been so hot…
i’m not a fan of mercury/lincoln, really…i like the hyundai approach…sell higher level cars under the same nameplate…simplicity…
07/20, 3:20 PM
posted by:
ayrtonJ
I hope Geely gets the deal and acquires Volvo from Ford. Volvo would benefit from being introduced into the Chinese market. The revenue generated could translate to better Volvo products for the international market.
07/20, 5:07 PM
posted by:
aesir
Hummers are like Ferrari’s. You don’t buy them for the gas mileage. They’re show pieces… or at least they were. Well that and they have some utility for military and other commercial usage.
07/21, 3:08 PM
posted by:
contra3
Uncle Butch, you need to start your own T.V. show, dude LOL
Kudos to Ford for the laser technology.
07/21, 9:08 PM
posted by:
erkdaklrk
Why not destroy Mercury and keep Volvo? What does Mercury actually do that Ford doesn’t? Volvo gives Ford platforms, safety, and a luxury brand with incredibly loyal followers. I can’t imagine that these customers would stay if Volvo was sold to the Chinese and built in China (honestly, when has a week gone by when a lead paint alert hasn’t gone out?) They should stay in Sweden and do what they have been doing, which is build stylish, safe cars under the ownership of Ford.