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Geely Walks From Volvo, Saab Deals

By Bertel Schmitt  From Gasgoo.comMay 15, 2009

The Chinese "home grown" automaker Geely had been widely rumored to be highly interested in snapping up Volvo or Saab. Or both. They either have lost interest. Or they employ the stratagem usual in a Chinese market: Shout "Tai gui le!" (too expensive), make an indignant face, and walk away. If they run after you, the next round of haggling ensues.

Geely "has not submitted, and has no plans to submit, any bids concerning the takeovers of 'Volvo' or 'Saab' as stated in recent press articles," said Geely in a notice to the Hong Kong stock exchange, and their stock price promptly jumped 13.6 percent, Gasgoo writes. It doesn't mean they were not or are not interested. They just didn't hand in a—formal—bid. They sure had been talking.

After having made three "inspection trips," to Sweden's Volvo, Geely's top management decided that the brand is not worth what they are asking for.

Now suddenly, Geely says the visits were part of an innocent annual overseas "tour of study" that can help it learn more of the market. And that Geely will not spend a huge sum of money to buy either Volvo or Saab, unless they go bankrupt and sell cheap.

So far, Geely's chairman, Li Shufu, grumbled that neither Volvo nor Saab are cheap deals. He shouldn't worry. They'll get cheaper.

Interesting tidbit: Geely revealed that their top management had a discussion about (not) acquiring Volvo. But they supposedly have not discussed Saab yet. After all, Saab already has gone bankrupt. And possibly has come running after Geely.

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