London : Zhejiang Geely Holding Group Co., the Chinese carmaker seeking to buy Ford Motor Co.'s Volvo Cars, may take control of Manganese Bronze Holdings Plc, maker of the iconic London black cab, the UK-based company said.
Geely's Hong Kong-listed unit may raise its stake in the company to 51 per cent from 19.9 per cent by buying new shares at 70 pence apiece, Mark Fryer, Manganese's finance director, said in an interview.
The Coventry, England-based automaker, which would raise about $21.5 million (Dh79 million) from the share sale, will spearhead Geely's plans to sell its own saloon cars in Europe, he said.
"Our future will be both as a manufacturer of black cabs in Coventry, although more of the parts will be coming from China, and an assembler and distributor for Geely vehicles," Fryer said yesterday.
Queries
Zhang Xiaodong, a Hangzhou, China-based spokesman for Zhejiang Geely Holding Group, referred questions to the Hong Kong-listed unit, Geely Automobile Holdings Ltd. Lawrence Ang, an executive director at the unit, didn't immediately answer calls. His assistant, Daniel Dai, declined to comment.
Manganese's LTI Vehicles unit and its predecessor companies have made cabs for the London market since 1948, according to LTI's website. Geely in early 2009 began manufacturing black cabs in Shanghai for the Asian market, as well as parts for the UK company's Coventry plant, under a joint-venture agreement.
Geely Auto rose 3.5 per cent to close at HK$4.16 in Hong Kong trading. The shares have declined 1.9 per cent this year.
"It is a reasonable move, but whether Geely can gain from the deal will depend on the sales volume," said Ricon Xia, an analyst at Daiwa Institute of Research in Hong Kong.
"Geely has enough funds for the purchase, and by taking over a majority of shares, Geely will have more decision-making power."
In a statement on Wednesday, Manganese said parts for its TX4 vehicles will be made in Shanghai, in a move that would eliminate about 60 jobs at its Coventry plant.
Chinese Premier Wen Jiabao is encouraging companies in the world's third-largest economy to acquire technology and take on foreign rivals. Geely unveiled the Emgrand, its first homegrown model specifically designed for Western markets, in December and is seeking to use Manganese as its European distributor.
Shanghai-based SAIC Motor Corp. paid $116 million for the design rights to MG Rover Group Ltd.'s Rover 25 and 75 cars in 2005 and became the owner of MG's plant in Birmingham.
Acquisition
DElay in volvo sale
Ford Motor Co. Chief Executive Officer Alan Mulally said talks to sell the automaker's Volvo unit to China's Zhejiang Geely Holding Group Co. are proceeding, rebutting local media reports the deal could be delayed.
"We are making progress on the negotiations," Mulally said in an interview in Shanghai, without giving a time frame for when the agreement will be made.
Ford aims to sign a $2 billion deal to sell Volvo to Geely by the end of this month, three people familiar with the talks said last week. Dearborn, Michigan-based Ford put Volvo up for sale in late 2008, part of a strategy of dropping European luxury lines to focus on its namesake brand. The China Daily said yesterday financing and technology transfer problems could delay the acquisition. "There is little chance for the deal to fall apart given that the two companies have both made a lot of efforts on the deal and have seen some progress," said Vivien Chan, an analyst with SinoPac Securities Asia Ltd. in Hong Kong. Buying Volvo would give the Chinese automaker access to Volvo's technology and "improve Geely's image" because Volvo is considered a premium brand in China.
