China’s Chery, one of the country’s budding automakers is rumoured to have its sights set on buying Volvo from a troubled Ford.
Although plans are still unconfirmed, insiders say that Chery has been
communicating with banks and private equity companies about the
possibility of a buyout. The buyout could set the company back over
RMB30 bn.
However, financial analysts predict that a takeover would increase
Chery’s debt equity ratio and have a negative impact on its planned IPO
in Shanghai next year. Instead they advised that the automaker take
another route and partner with a number of private equity firms and
launch a joint acquisition.
Established in the late 1990s by the local government of Wuhu, Anhui province, Chery produces several lines of passenger cars.
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