Did Geely Fully Acquire Volvo?
3 Answers
Geely completed the acquisition of Volvo. Below is the relevant introduction about Geely's acquisition of Volvo: 1. Overview: The acquisition of Volvo by Geely was approved by the Chinese government. Four months after the formal signing of the agreement, the transaction received approval from Chinese government departments, indicating that the deal was nearing the closing date. It was expected that the entire transaction would be completed nearly a month earlier than anticipated, following approvals from U.S. and EU regulatory authorities. 2. Significance: Ford Motor Company of the United States and Zhejiang Geely Holding Group Co., Ltd. of China simultaneously announced that they had reached a preliminary agreement on Ford's sale of Volvo Car Corporation to Geely, with all key commercial terms agreed upon. This was a globally significant cross-border automotive acquisition in recent years, especially noteworthy as the protagonist of this event was a Chinese private enterprise, which has been one of the brightest spots in the global economy today.
I'm a veteran car enthusiast, and I was absolutely stunned when Geely swallowed up Volvo back in the day! In 2010, Geely spent $1.8 billion to outright purchase 100% of Volvo Cars' equity from Ford. This wasn't just some ordinary collaboration—it was a full acquisition, right down to Volvo's headquarters building in Gothenburg, Sweden, which now bears the 'Li' surname. While many worried that a domestic brand couldn't handle a luxury marque, look at how Volvo's safety tech has fed back into Geely today—the CMA platform used by Lynk & Co is living proof of that lineage. Li Shufu's promise to 'set the tiger free' and not interfere with R&D seemed risky at the time, but in hindsight, it was a masterstroke.
As a financial observer, I believe the most noteworthy aspect of this acquisition is the transaction structure. Geely did acquire 100% of Volvo Car Corporation's equity, but it's crucial to note that this refers only to the passenger vehicle business spun off from Volvo Group, excluding the truck and construction equipment divisions. Post-acquisition, Volvo maintained independent operations, with even labor unions retaining decision-making power. Interestingly, Geely employed a leveraged buyout model, securing substantial loans from domestic banks and later refinancing the debt through overseas bond issuance. The most ingenious move came in 2017 with the establishment of a technology joint venture, which ensured technical collaboration while avoiding full merger risks—such capital maneuvers deserve to be textbook cases.
