Unfazed by Swedish unions calling for an investigation into the Ford-Volvo-Geely deal, Geely is getting itself ready to swallow the big Swedish fish. The deal is already being feted as episode two of the takeover of international icons by the Chinese.
Whenever someone tries to cite a successful foreign takeover in China, he’ll inevitably shout “Lenovo!” In 2005, Chinese government-backed Lenovo had acquired the former IBM PC Company Division, along with their ThinkPad line of notebook PCs for approximately $1.75b. In a five year transitional deal , IBM helps to market and to support the products. For a few years, the Lenovo-made Thinkpad even carried the vaunted IBM logo. Then, Lenovo thought their brand is stronger than IBM’s and dropped the logo.
The not quite closed Geely-Volvo deal is already lauded as the “Lenovo-IBM” of the auto industry, says Reuters. According to an unnamed source, “Geely Chairman Li Shufu wants to do something like Lenovo-IBM.”
The same source said that the deal “is expected to be done before Chinese New Year, and then Geely will quickly launch integration.” In 2010, the Chinese Lunar New Year will start on Feb 14.
Unusual for a Chinese company, Geely is bringing in heavy foreign artillery: Geely has hired German-based Roland Berger Strategy Consultants to launch a 100-day internal review and restructuring to improve Geely operations. Geely also signed Deloitte Touche Tohmatsu to work on post-acquisition integration for Volvo.
With the IP questions settled between Geely and Ford, the remaining issues should be relatively minor. Unless Geely and Ford really want to copy the Lenovo-IBM deal. With Ford helping to market and to support Geely-made Volvos. These days, everything is possible.