Zhejiang Geely Holding Group laid out how it and Ford Motor plan to handle intellectual property (IP) rights for Volvo Car Corp., clearing a major barrier in its bid to acquire the Swedish brand.
Ford named Geely Holding, the unlisted parent of Geely Automobile, as the preferred bidder for Volvo cars on Oct. 28. No price was made public but media reports have estimated it could be around $2 billion.
Geely said in an emailed statement on Friday that it remained preferred bidder to buy Volvo outright, confirming earlier remarks made to Chinese media.
Volvo will retain ownership over key technologies and IP that it has developed and will retain access to all Ford IP [that] Volvo plans to use to implement its business plan, Geely said.
Geely added that owning Volvo would give it access to a significant suite of IP, including Volvo's safety and environmental IP.
A number of Chinese carmaker are keen to break into foreign markets and are aggressively developing their own brands while moving beyond traditional offerings in the small, low-priced car segment into more upmarket vehicles.
But intellectual property rights have been seen as a key issue hindering Chinese carmakers from taking over struggling overseas automakers.
Beijing Auto cited intellectual property as the reason behind its failure to reach a deal with General Motors over its Opel unit in July.
In October, similar concerns threatened to derail Geely's bid for Volvo, a source close to the talks said at the time.
Volvo is more closely woven into Ford's wider operations than its other top-end European brands, Jaguar and Land Rover, which it sold to India's Tata Motors last year.
A Ford spokesman said: As in past divestiture agreements, any agreement we reach with Geely would take into account issues such as IP rights and protections and the engineering, manufacturing and supply relationship between Ford and Volvo.
(Additional reporting by Simon Rabinovitch in Beijing; editing by Chris Lewis and Karen Foster)