| In a win for China’s car industry, privately-owned Chinese automotive group Zhejiang Geely Holding Group Co Ltd (Zhejiang Geely) has reached an agreement with Ford Motor Company (Ford) to fully acquire Volvo Car Corporation (Volvo) for US$1.8 billion. The transaction encompasses agreements on intellectual property rights, supply and R&D arrangements between Volvo, Zhejiang Geely and Ford. The deal is significant on two fronts, in that it represents the first takeover of a global premium carmaker by a Chinese corporation, and also marks the largest international automotive acquisition – and reportedly the first headline brand acquisition – by a privately held Chinese company.
The agreement between the companies was signed by Zhejiang Geely’s chairman, Li Shufu, and Ford’s CFO, Lewis Booth, at a ceremony in Gothenburg witnessed by the PRC’s Minister of Industry and Information Technology and the Swedish Deputy Prime Minister and Minister for Enterprise and Energy. Pending regulatory approvals, the two companies expect the transaction to be completed in the third quarter of this year. It is thought that the acquisition will further prompt big-ticket acquisitions by Chinese companies. Freshfields Bruckhaus Deringer scored a lead role on the deal, with a multi-office team spanning Beijing, Hong Kong, London, Moscow and New York advising new client Zhejiang Geely. The team was led by corporate partners Christopher Bown (London), Teresa Ko (Hong Kong), Jack Wang (Beijing) and Tim Wilkins (New York), with IP partner Avril Martindale (London) advising on the critical intellectual property agreements. Teresa Ko, who is also the firm’s managing partner for China, commented, “This is a landmark deal, the largest international automotive acquisition by a privately owned Chinese company. We are delighted to have been a part of what is a significant milestone in China’s ‘Go Global’ strategy.” Hogan & Hartson acted for longstanding client Ford, led by the firm’s European M&A head, William Curtin. |
