How Geely won

Commentators have noted that Tengzhong's greatest failing was its unpreparedness for its potential undertaking. It did not procure enough financing and seemingly shied away from communicating with regulators.

“For significant or high profile M&A transactions, most companies would try to smooth the waters with the regulators ahead of time,” said Chua. Offers without explicit fund-raising and developmental operation plans will not carry enough assurances to appease the Ministry of Commerce (Mofcom).

The State Administration of Foreign Exchange and other crucial Chinese regulatory bodies had no accurate information on the structure of the deal and Tengzhong's motives for following through.

While the Chinese government strongly supported Geely's buyout of Volvo, as evidenced by the overwhelming support from state-owned banks and investment funds, funding sources for Tengzhong's bid were patchy at best. Chinese and foreign banks had backed out, and it appeared that Sichuan private investors may have been the sole driving force behind the bid.

Geely also had the expertise to mitigate sensitive issues prevalent within the auto industry. After months of negotiations with Ford, guarantees were set in place for Volvo's worker unions, shared intellectual property rights and acquisition capital that satisfied both parties involved.

Tengzhong did not pursue the same route. Known in China exclusively for its road construction machinery business, the company did not possess the necessary licences and capabilities for manufacturing automobiles. This became an obstacle the company failed to overcome before the National Development and Reform Commission of China (NDRC).

Compared to Geely's full purchase, Tengzhong only managed to secure Hummer's brand name from General Motors under their final agreement—clearly a less attractive deal for Beijing. Jason Chan