Volvo Cars’ acquisition by Geely and Daqing has been approved by the European Commission (EC).
The Commission gave the green light to the deal after it concluded there was no significant impediment to competition in the European Economic Area or any substantial part of it.
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Chinese car manufacturer Geely sells the majority of its vehicles in its domestic market, while investment firm Daqing is owned by the government of north-east China.
A statement from the EC noted: “The proposed transaction showed the horizontal overlaps between the activities of the companies were very limited, since Geely has almost no passenger car sales in Europe.
“Furthermore, Volvo’s very limited presence in the field of supply of diverse car components would not allow the merged entity to close off other market players.”
The EC added its approval of the merger was “without prejudice” to any eventual assessment or decision that it may undertake or adopt in the state aid field that could affect the parties to the present transaction.
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By GlobalDataThe proposal did not initially qualify for the EU’s one-stop shop review because the purchasers did not meet what the Commission refreed to as a “triggering turnover threshold.”
But since the deal was notifiable in at least three EU member states, the parties asked the Commission to examine the deal and the countries concerned agreed to it.
Geely is reportedly buying Ford Motor’s Volvo for US$1.8bn and has said it aims to sell 150,000 Volvo cars annually in China by 2015.
The company plans to assemble the Volvo XC60 locally by the end of 2010, followed by the S60 model in 2011.
