Geely-Volvo Deal Approved by Chinese Regulator

Regulators in China approved the deal, expected to be completed one month ahead of schedule

(Beijing) - Geely's proposed acquisition of the Ford Motors luxury vehicle unit Volvo won approval from Chinese regulators, signaling the near-completion of the transaction which is expected to be one month ahead of schedule.

A source close to the deal told Caixin on July 29 that the US$ 1.8 billion deal received the green light from the Ministry of Commerce and the National Development and Reform Commission.

The publicity department of the Ministry of Commerce confirmed the approval with Caixin. The source told Caixin that the Chinese government has been "quite supportive" of the deal. The deal was approved by regulators in the United States and the European Union in June and July.

Geely signed the formal agreement on March 28 with Ford to acquire the entire stake in Volvo. Li Shufu, chairman of Geely, said that funding of the acquisition and future operation will cost a total of US$ 2.7 billion.

On July 6, a press release from the European Commission concerning the approval of the deal for the first time confirmed that an investment company controlled by the State-owned Assets Supervision and Administration Commission (SASAC) of Daqing City in Northern China's Heilongjiang Province will invest in Geely's acquisition. Caixin learned earlier that Daqing SASAC will offer US$ 700 million to US$ 800 million for the deal.

Geely hasn't confirmed the location of the Chinese plant for Volvo. Caixin has learned from industry insiders that Shanghai has been suggested as a location.