Chinese Government OKs Geely's Volvo Buy. Ford Plays Hard to Get

Geely has been given the red stamp of approval to go forth and buy Ford’s Volvo, Gasgoo reports. The permit was issued by China’s National Development and Reform Commission, which has to approve foreign acquisitions exceeding $100 million. Gasgoo says that Geely is “the only Chinese automaker that has won official confirmation on such deals.” A thinly veiled hint that the Hummer deal is still up in the air. Changan, Ford’s joint venture partner for Volvo in China, said it would not run for Volvo “because of unspecified conditions,” Gasgoo says. How much money will change hands?

A few days before the announcement, Geely’s Chairman Li Shufu bought 98 million shares of Hong Kong listed Geely for $129.36 million (US, not Hong Kong $). He now owns 51.54 percent of Geely.

Not so fast, says the Wall Street Journal, which hopefully has its facts and currency rates together this time. Citing a “knowledgeable person,” the WSJ has it that “Ford has decided to wait for General Motors Co. to wrap up its sale of Adam Opel GmbH unit, and is hoping to invite a loser in that two-way bidding race to bid for Volvo.”

The WSJ‘s mystery source says that “three players” are bidding for Volvo: Geely, BAIC, and an unidentified European investment group. Deep throat says Ford expects BAIC to go after Volvo with greater vigor (and more money). Ford also hopes that whoever loses the Opel deal, Magna, RHJ ( or both) come after Volvo.

Every seller likes a bidding war. Even if it’s just a wet dream. With Opel, the lucky buyer puts a few hundred million Euros on the table and receives billions of German government Euros, plus a sizable car company. With Volvo, it’s all cash, no government money and a much smaller car company.