Geely Holding's attempt to buy Ford Motor Co's (F.N) Volvo car unit is in danger of stalling over disagreements about intellectual property rights, a source close to the talks said on Wednesday.
Representatives from Ford and Geely, parent of Hong Kong-listed car maker Geely Automotive (0175.HK), have been discussing a sale, for around $2 billion, since early this year.
The latest talks, being held in London, are focused on the U.S. car maker's concerns about sharing its proprietary technology and plans for new products, said the source in response to a Reuters query about an earlier Bloomberg report.
An impasse on that issue could scupper the negotiations.
Ford said talks were ongoing with interested parties regarding the sale of Volvo. We have been consistently stating that this process will take some time to unfold, and that is still the case, a spokesman said.
Volvo Cars spokeswoman Maria Bohlin said: Our response is, like always, that we cannot comment on the sales process.
Geely said last month it was considering a bid for Volvo along with a local government-backed investment firm.
It also said a Goldman Sachs (GS.N) affiliate was investing $334 million in Geely Auto via convertible bonds and warrants, a move widely seen as boosting Geely's growth ambitions.
Buying Volvo would give Geely, China's tenth-biggest autos manufacturer, access to the technology it needs to upgrade its cars. But for Ford, that could be a reason to hold back from a deal.
Last week, a former Ford engineer, Xiang Dong Yu, was arrested and charged in the United States with stealing trade secrets from Ford and using them to try to get work with Chinese auto makers.
I'm not at all surprised that intellectual property rights would be a roadblock in the Volvo sale as IPR has always been an issue in China, said Boni Sa, analyst at CSM Worldwide, a global industry consultancy.
(Additional reporting by Fang Yan in SHANGHAI; Editing by Chris Lewis and Valerie Lee)