Geely rumored to establish Chinese headquarters in Beijing
Two companies that have a relationship with Geely Holding Group are busy registering with the Beijing Administration for Industry and Commerce. Although the names of the two firms are still unknown, they are expected to play a vital role in Geely's proposed acquisition of Volvo.
On Oct. 23, 2009, Geely and Ford Motor Company jointly announced that they had reached consensus on the acquisition. A formal agreement is likely to be inked in the first quarter of 2010, and the transaction is due to be completed in the second quarter after receiving approval from government regulators.
As expectations are running high that the acquisition will be successfully carried out, Geely is making preparations for the upcoming takeover of Volvo. The company plans to establish an international investment company in Beijing with preliminary registered capital between RMB8 billion (approximately $1.2 billion) and RMB9 billion (approximately $1.3 billion). Geely will become the company's majority shareholder and effective controller, and other shareholders include investors such as several Chinese banks.
The company's registered capital will be boosted to US$ 2 billion in 2010, enough for the acquisition of Volvo. Meanwhile, Geely will register and set up another investment company in Sweden, which will acquire the 100 per cent stake in Volvo.
Once the transaction is completed, Geely will establish its Chinese headquarters in Beijing, according to a source. And previously, Geely Board Chairman Li Shufu confirmed that Volvo would have two local markets in the future, namely, China and Sweden, indirectly proving the saying that Geely would set up its Chinese headquarters in Beijing. However, both sides refused to comment.
