2010-07-07 10:36

BRUSSELS - The European Commission said on Tuesday it had approved the takeover of Swedish carmaker Volvo by Chinese rival Geely and China's State-owned investment firm Daqing.

"The commission concluded that the transaction would not significantly impede effective competition" in the European Union (EU), the EU's antitrust watchdog said in a statement.

Geely is a fully integrated manufacturer of cars, motorcycles and scooters in China. Currently, the vast majority of its passenger cars are sold in China.

Daqing is owned by the government of Daqing city, in Northeast China, and is solely engaged in the investment and management of State-owned assets.

Volvo manufactures, distributes and sells a wide range of passenger cars under the Volvo brand worldwide, and it is also active in supplying components.

The transaction did not initially qualify for the EU's one-stop shop review because the acquirers did not meet the triggering turnover threshold, but since it was notifiable in at least three EU member states, the parties asked the commission to examine the deal and the countries concerned agreed to it.

Geely signed a deal with Volvo in March, under which Geely would pay $1.8 billion in exchange for the whole shares. Part of the money came from Daqing.