China Approves Geely Volvo Buy

Things begin to unravel at increasing speed for the projected Volvo-Geely deal, as the Chinese Commerce Ministry announced it has approved the purchase of the Swedish unit by Geely. The announcement comes the same day when inside sources began talking about the deal being signed as soon as next week.

"This was the final stage of the government approval," a ministry spokesman told AP. "There are no conditions attached." The approval comes after the European Union gave its seal of approval earlier this month.

The deal will see the Chinese manufacturer strip Ford of its last big European asset. Geely will pay Ford $1.8 billion for the Swedish unit, the big part of it in cash. It will receive in turn a carmaker renowned at least for the safety of its cars.

Given the fact that Volvo vehicles use Ford components, the two companies have developed an intellectual property management plan that will allow both to deliver their business plans without risks.

The plan includes measures like granting sublicenses for certain Ford intellectual property assets related to Volvo Cars to third party companies. The American manufacturer will also continue to supply certain components to Volvo, as well as provide technical know-how to Geely.

Geely has already planted a man at the top of Volvo's management. Its chairman, Li Shufu, will take up the same exact position within Volvo Car Corporation. All there's left to do now is find a CEO and conclude the deal with Ford. All that, as said, is expected to happen next week.