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China's Geely Auto eyes foreign M&A for tech, markets

Published 03/14/2009, 02:18 AM
Updated 03/14/2009, 02:24 AM

SHANGHAI, March 14 (Reuters) - China's Geely Automobile Holdings, considered a potential buyer of assets from struggling global auto giants, said foreign acquisitions would allow it to secure technology and new markets but it remains cautious about possible deals.

In a statement on its website explaining its views on overseas acquisitions, issued in response to heightened media interest on the matter, the automaker also said such acquisitions could help it to avoid trade protectionism and currency risks.

But a Geely spokesman said on Saturday that the statement, posted on the company's website on Friday, did not indicate a change in the company's wary stance.

"We are closely watching what's happening overseas and will be cautious," he said.

Earlier this month, sources familiar with the situation told Reuters that Geely and Dongfeng Motor Group were among potential bidders that had expressed interest in General Motors' Saab brand.

Media reports have also mentioned Geely, Dongfeng and Chongqing Changan Automobile Co as potential bidders for Ford Motor's Volvo car unit.

A senior Geely executive told Reuters early this month, however, that his company had not held talks about a possible acquisition of Saab or other foreign brands and that it was not interested in them.

Chinese government officials and company executives have also sounded a note of caution toward overseas acquisitions, especially given the domestic industry's relatively short history and lack of expertise in foreign markets.

But Geely, which is trying to shake off its image as a purveyor of low-priced cars, is one of several ambitious Chinese automakers keen to expand into developed markets.

It aims to sell 250,000 cars in 2009 and boost that further to 2 million by 2015, with about two-thirds sold overseas.

"Overseas acquisitions are an important model for Geely for finding capital, finding markets and finding global partners," the statement on the company's website said. (Reporting by Edmund Klamann and Fang Yan; Editing by Lincoln Feast)

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