Geely Receives $2.1Bn Financing for Volvo Acquisition

Volvo S60 Concept photo

Earlier this week, we reported that Geely assured everyone that the Volvo acquisition is going according to plan, although an official agreement had not been signed yet. Now, the Chinese company announced that it has secured a $2.1 billion financing for the acquisition of the Swedish brand, as Reuters reports, citing a Swedish business daily.

According to Dagens Industri’s sources, the money have been provided by Chinese banks and regional government agencies. The paper’s sources said that the funds were already in Geely’s bank account. The paper reported that the Chinese company had already offered guarantees to Ford, the current owner of Volvo, detailing the financing scheme for the carmaker's acquisition.

Geely previously planed to reach an official agreement by the end of last month and reach the deal’s completion point sometimes during May. The Chinese company plans to bring Volvo to a break-even point by next year, as it wants to double the Swedish brand’s annual production through the construction of a new production site in Beijing.

Volvo also has high expectations for the future: the company’s CEO, Stephen Odell, said that he expects the Volvo sales on the Chinese market to surge after the transaction will be completed. Currently, the company’s Swedish Torslanda plant is working at a reduced capacity due to the lack of demand.

When the sale will be completed, Geely will take control of all Volvo assets, including factories, cars, parts, research & development centers, production lines and technological patents. The latter is extremely important, as we are talking about hybrid technologies.