Geely will pay less than US$1.6b. for Volvo

Geely, the largest Chinese domestic privately-owned automaker, will pay less than US$1.6 billion in its acquisition of Swedish brand Volvo, reported state media. Volvo’s assets were appraised at US$1.5 billion, more than a 75% discount to the price Ford paid in 1999. The acquisition deal will be signed on February 8, with the intention of closing the deal in May. In order to reach its goal of breaking even by 2011, Geely will produce 300,000 Volvos per year in its Beijing factory. Acquiring Volvo plays into the Zhejiang-based Chinese manufacturer’s ambitions to launch a global brand and benefit from Volvo’s reputation and brand recognition.