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March 23, 2010

CHINA: Geely hopes for Volvo deal in a week

Zhejiang Geely Holding Group on Tuesday said talks to buy Ford's Volvo car unit were on track and it expected to sign an agreement in about a week.

Zhejiang Geely Holding Group on Tuesday said talks to buy Ford’s Volvo car unit were on track and it expected to sign an agreement in about a week.

Media reports had suggested that Zhejiang Geely, China’s largest private carmaker and the parent of Hong Kong-listed Geely Automobile, faced financial and technical problems that could delay the transaction, worth up to US$2bn, Reuters said.

“It’s a complicated deal and any twists and turns are normal,” Geely spokesman Yuan Xiaolin told the news agency.

The talks were moving ahead as planned and Ford and Geely planned to sign a sales and purchase agreement by the end of this month, he added.

Zhejiang Geely will pay $1.8bn for Volvo , with the deal to be signed as soon as Sunday, The Financial Times reported on Tuesday. Another $750 million of working capital is being raised for the Swedish brand.

China’s vice president, Xi Jinping, will be in Sweden on Saturday for a state visit. A person close to the transaction said the deal would probably be signed on Sunday or Monday, according to the paper.

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