Geely shares jump 5pc after parent's Volvo deal
Tuesday, 30 March 2010
Beijing, Mar 29 (Reuters): Shares in Geely Automobile Holdings Ltd rose as much as 5 per cent to a two-month high Monday, on expectations that the Chinese automaker will benefit from its parent's plan to buy Ford Motor's Volvo car business.
Zhejiang Geely Holding Group, China's biggest private car maker, signed an agreement Sunday to buy the Sweden-based premium brand from Ford for $1.8 billion.
Analysts said the listed company was likely to benefit from a technology transfer and a brand upgrade after the Volvo deal is completed in the third quarter.
"There is no immediate financial impact, but it will help upgrade the branding of Geely cars," said Rebecca Tang, an analyst at CIMB.
Geely Automobile said in a statement Monday that the parent company will sell all or part of the Volvo business to the listed company if approved by independent non-executive directors of Geely Automobile.
But analysts said the listed company will probably wait at least until Volvo turns around before it will seriously consider buying the asset.
Zhejiang Geely Holding Group, China's biggest private car maker, signed an agreement Sunday to buy the Sweden-based premium brand from Ford for $1.8 billion.
Analysts said the listed company was likely to benefit from a technology transfer and a brand upgrade after the Volvo deal is completed in the third quarter.
"There is no immediate financial impact, but it will help upgrade the branding of Geely cars," said Rebecca Tang, an analyst at CIMB.
Geely Automobile said in a statement Monday that the parent company will sell all or part of the Volvo business to the listed company if approved by independent non-executive directors of Geely Automobile.
But analysts said the listed company will probably wait at least until Volvo turns around before it will seriously consider buying the asset.