Communist Party-backed Geely buys Volvo stake

[kscarbel2]

Reuters  /  December 27, 2017

China’s Geely Holding, owner of the Volvo car brand, is buying an 8.2 percent stake in Swedish truckmaker AB Volvo from activist investor Cevian Capital, worth around $3.3 billion at current market prices.

The value of the investment amounted to around 27.2 billion Swedish crowns ($3.26 billion), a Reuters calculation showed.

Geely paid 3.25 billion euro ($3.86 billion) for the stake.

The deal makes [China's] Geely the biggest individual shareholder in Volvo Group and second ranked in terms of voting rights behind Swedish investment firm Industrivarden.

“Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo,” Geely Holding Chairman [and Communist Party Secretary] Li Shufu said in a statement on Wednesday.

[Red Horse]

42 minutes ago, kscarbel2 said:

Reuters  /  December 27, 2017

China’s Geely Holding, owner of the Volvo car brand, is buying an 8.2 percent stake in Swedish truckmaker AB Volvo from activist investor Cevian Capital, worth around $3.3 billion at current market prices.

The value of the investment amounted to around 27.2 billion Swedish crowns ($3.26 billion), a Reuters calculation showed.

Geely paid 3.25 billion euro ($3.86 billion) for the stake.

The deal makes [China's] Geely the biggest individual shareholder in Volvo Group and second ranked in terms of voting rights behind Swedish investment firm Industrivarden.

“Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo,” Geely Holding Chairman [and Communist Party Secretary] Li Shufu said in a statement on Wednesday.

Beautiful! Makes the Bulldog sit a little lower on the hood! The one thing I wish Ford had NOT sold was Volvo.

[macks in nigeria]

Does this mean Geely now has a stake indirectly in Mack?

[kscarbel2]

32 minutes ago, macks in nigeria said:

Does this mean Geely now has a stake indirectly in Mack?

Yes.....8.2 percent.

[macks in nigeria]

Well I am sure you are familiar with the Chinese proverb about the journey of a thousand miles starting with a single step.This might just be the start  of Geely acquiring Volvo Trucks and by extension Mack.Watch out the Chinese are coming.

[kscarbel2]

China's Geely buying stake in Mack Trucks' parent company

The Morning Call [local Allentown, PA newspaper]  /  December 27, 2017

The Chinese owner of Sweden's Volvo Cars is buying a stake in truck manufacturer AB Volvo.

Geely Holding Group said Wednesday the acquisition of shares from Cevian Capital, a fund manager, would give it 8.2 percent of Volvo's share capital and 15.6 percent of voting rights.

Financial terms weren't disclosed. Analysts estimated the value of the deal at around 27 billion kronor ($3.3 billion).

AB Volvo is the parent company of Mack Trucks, the North Carolina-based truck maker that assembles its heavy-duty vehicles at a massive plant in Lower Macungie Township.

Mack spokesman Christopher Heffner did not immediately respond to a request seeking comment on Wednesday’s news.

[Jamaican Bulldog]

Many of us in the auto industry cringed when Geely bought the distinctive Swedish Volvo car brand. However, we were happy years later to find out that while Geely pumped a lot of money into Volvo which helped it revitalization, it also allowed the main design and engineering centers to remain in Sweden so it would not lose certain unique brand traits appreciated by loyal customers. The Chinese can be very cognisant of brand identity and prestige.

[macks in nigeria]

It is then possible that if Geely goes on to acquire Volvo Trucks the Mack brand might not just survive but also see a return to glory days as Geely will be a "neutral" owner and not drive an agenda of favoring one brand over another.

[Jamaican Bulldog]

Geelyis also the largest privately  owned auto co in China.

[kscarbel2]

59 minutes ago, Jamaican Bulldog said:

Geelyis also the largest privately  owned auto co in China.

Geely is not privately owned.

[41chevy]

2 hours ago, macks in nigeria said:

It is then possible that if Geely goes on to acquire Volvo Trucks the Mack brand might not just survive but also see a return to glory days as Geely will be a "neutral" owner and not drive an agenda of favoring one brand over another.

Sadly, I feel when Geely and Volvo are done, MACKS bones will lie bleached in the sun, nothing for even the ants to eat. Geely will get access to a large dealer network.

[Frenchy Mack]

The worm is in the fruit and that is not good for the future of Mack trucks and Renault Trucks

[Jamaican Bulldog]

20 hours ago, kscarbel2 said:

Geely is not privately owned.

According to this article in Automotive News, Geely owned by Chinese billionaire Lu Shufu is the largest privately owned auto company in China. I am not sure in what context of 'private' that is in China.

http://www.autonews.com/article/20171228/OEM02/171229878/

".....If the successful revival of Volvo cars under Li is any precedent to go by, the transaction may be beneficial to Volvo trucks as well. Li started out making refrigerator parts and later turned a bankrupt state-owned manufacturer into China’s biggest privately owned carmaker. He cemented his reputation as a savvy dealmaker after reviving Volvo Car in the face of widespread industry skepticism following the purchase from Ford in 2010.

He gave Volvo Car’s engineering team the resources to invest in new models. At the same time, he lowered the Swedish manufacturer’s high costs by jointly developing vehicle underpinnings with Geely, while building a plant in lower-cost China for exports to markets including the U.S."

[kscarbel2]

10 minutes ago, Jamaican Bulldog said:

According to this article in Automotive News, Geely owned by Chinese billionaire Lu Shufu is the largest privately owned auto company in China. I am not sure in what context of 'private' that is in China.

http://www.autonews.com/article/20171228/OEM02/171229878/

".....If the successful revival of Volvo cars under Li is any precedent to go by, the transaction may be beneficial to Volvo trucks as well. Li started out making refrigerator parts and later turned a bankrupt state-owned manufacturer into China’s biggest privately owned carmaker. He cemented his reputation as a savvy dealmaker after reviving Volvo Car in the face of widespread industry skepticism following the purchase from Ford in 2010.

He gave Volvo Car’s engineering team the resources to invest in new models. At the same time, he lowered the Swedish manufacturer’s high costs by jointly developing vehicle underpinnings with Geely, while building a plant in lower-cost China for exports to markets including the U.S."

Yes, that's what you'll indeed read in the western media. But it's not true.

[Jamaican Bulldog]

4 minutes ago, kscarbel2 said:

Yes, that's what you'll indeed read in the western media. But it's not true.

I could see where you are right. I was perplexed when I saw it referenced as private. Nothing that large is normally private in China. Maybe he is a Princeling in the Communist party. Even large foreign companies that build things there have be a 51% Chinese gov owned joint venture.

[ekennedy21]

This was in the Wall Street Journal yesterday. With the 8.2% ownership they get just over 14% voting rights. This for people who don't realize it is a huge voting share. Geely will have a big say in Volvo and Mack moving forward. 

[kscarbel2]

9 minutes ago, Jamaican Bulldog said:

I could see where you are right. I was perplexed when I saw it referenced as private. Nothing that large is normally private in China. Maybe he is a Princeling in the Communist party. Even large foreign companies that build things there have be a 51% Chinese gov owned joint venture.

Foreign companies can not hold more than a 50% stake (not 51%) in a joint venture (in most industries), unless they are producing solely for export (which fewer and fewer do because of the high labor costs there today).

[Jamaican Bulldog]

3 minutes ago, kscarbel2 said:

Foreign companies can not hold more than a 50% stake (not 51%) in a joint venture (in most industries), unless they are producing solely for export (which fewer and fewer do because of the high labor costs there today).

Thats why I said it has to be 51% Chinese gov OWNED joint venture, at least.

[kscarbel2]

1 hour ago, Jamaican Bulldog said:

Thats why I said it has to be 51% Chinese gov OWNED joint venture, at least.

At least 50 percent government owned. (The foreign company can own up to 50%)

[Lmackattack]

1 hour ago, kscarbel2 said:

At least 50 percent government owned. (The foreign company can own up to 50%)

is that just what the Chinese government says is the max but in reality they limit it to less than that to keep prodution HQ in China

 

[TS7]

Nothing happens in RED China without Communist Party ok.

[kscarbel2]

9 hours ago, Lmackattack said:

is that just what the Chinese government says is the max but in reality they limit it to less than that to keep production HQ in China

 

Foreign companies can indeed own up to 50 percent in joint ventures.

The limit allows the country to share in the profit, rather than just the foreign aggressor taking 100% of the proceeds.

[Red Horse]

In  any case, I have to believe that China for sure holds the key to keeping the loon in North Korea in power.  In spite of all the sanctions that have been imposed we now see confirmation that China is lightering tankers at sea so oil ends up going to North Korea.

When will we wake up to the fact that  China can't be trusted.  Yet we continue to give them increasing stakes in all phases of our industrial base.

What negotiating power do we have left??  Boycott Chinese goods?  We could-but that would mean the end of Walmart!

Here's a good thought-maybe Tillerson and Mattis should have to approve any commercial venture involving China

 

[kscarbel2]

22 hours ago, Red Horse said:

In  any case, I have to believe that China for sure holds the key to keeping the loon in North Korea in power.  In spite of all the sanctions that have been imposed we now see confirmation that China is lightering tankers at sea so oil ends up going to North Korea.

When will we wake up to the fact that  China can't be trusted.  Yet we continue to give them increasing stakes in all phases of our industrial base.

What negotiating power do we have left??  Boycott Chinese goods?  We could-but that would mean the end of Walmart!

Here's a good thought-maybe Tillerson and Mattis should have to approve any commercial venture involving China

Bob, our government and media continually "drill it in" that China is the key to dealing with the DPRK. But in fact, that's not the true situation.

As for trust, it seems that nobody can trust anyone. We now know that our intelligence community was spying on most of the western European leaders (our so-called allies) including French Presidents Jacques Chirac, Nicolas Sarkozy, Francois Hollande and German Chancellor Angela Merkel. So I can't see the "we can't trust China" argument, when we ourselves don't practice what we preach.

http://www.bbc.com/news/33248484

Everyone looks out for their own. The global political arena is alike football, some plays are good......some bad, some good plays are executed well.....and some badly. You need to have sound plans, clear goals that justify sticking your neck out, the ability to quickly alter the plan due to evolving situations, and darn good judgement.

 

[41chevy]

On 12/30/2017 at 10:08 AM, Red Horse said:

In  any case, I have to believe that China for sure holds the key to keeping the loon in North Korea in power.  In spite of all the sanctions that have been imposed we now see confirmation that China is lightering tankers at sea so oil ends up going to North Korea.

When will we wake up to the fact that  China can't be trusted.  Yet we continue to give them increasing stakes in all phases of our industrial base.

What negotiating power do we have left??  Boycott Chinese goods?  We could-but that would mean the end of Walmart!

Here's a good thought-maybe Tillerson and Mattis should have to approve any commercial venture involving China

 

China manufactures over 55 percent of the batteries Lithium-ion batteries used in cel phones, computers, tools, EV's, satellites  and sadly even in most all of our military applications. In addition China makes close to 75 percent of our LiPo and conventional batteries. A trade war will have far reaching consequences with our military and our communication / computer usage. American business wholly or partially owned by China is staggering. Some are Smithfield Food, G.E. Appliances, Motorola Mobil, Anagang Insurance, IBM PC Business, triple H Coal,  Delphi Corp, Hoover, Dirt Devil, Tele Dyne, Cheapeake Energy, 40% of PSEG,  Cirrus Wind Energy, Blackstone Financial, Morgan-Stanley, Genworth Financial,  Visa, Sheraton Hotels, Rosewood Resorts, Boston power, ITalk, Ingram Micro Systems, Pirelli, Quorum Systems  and a large percentage of GM Global. This is only a very small list of U.S. companies not even including the European and the other parts of Central and South America.

Seems Corporate and Wall Street greed, sold a lot of our financial, communication and energy businesses down the river so to speak. Trade war for leverage? Not with out severe repercussions here. China has been busy with out being noticed. 

Edited December 31, 2017 by 41chevy