China's Geely buys Volvo for $1.5bn

China's Geely completed the $1.5bn (£1.2bn) acquisition of Volvo from Ford yesterday, catapulting a Chinese car maker into the global league for the first time.

And fresh from the signing ceremony with Ford's chief financial officer Lewis Booth in London, Geely's chairman Li Shufu is with Manganese Bronze today for talks about Geely taking control of the London taxi-maker. The Volvo deal was sealed with $1.3bn in cash and a $200m loan note – slightly lower than the $1.8bn price agreed in March due to "adjustments" in pension obligations and working capital, Geely said. Ford said it expects further proceeds following a "true up" later in the year.

The deal is the first takeover of a premium global car brand by a Chinese company. Mr Li described the deal as "a historic day for Geely", and pledged to maintain Volvo's identity. "This famous Swedish brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design," Mr Li said.

The marque will keep its Gothenburg headquarters, its factories in Sweden and Belgium, and its use of parts and engines from Ford.

Stefan Jacoby, the former boss of Volkswagen America who is taking over as Volvo chief executive, said: "Our employees, suppliers, dealers – and above all our customers – can be confident Volvo will preserve its special status as industry leader in vehicle safety and innovation."

Geely is one of China's largest car companies. But while the booming Chinese market became the world's biggest last year, the industry is fragmented: Geely sold just 330,000 cars in 2009, the same as Volvo. The group plans to use vast Chinese demand to double Volvo sales, while using the Swedish group's technology, dealership network and global brand to push Geely outside China.

Geely already owns 23 per cent of Manganese Bronze, and has been in talks since March about raising its stake to 51 per cent.