And finally, the deal is finalised. In March Geely agreed to buy Volvo from Ford Motors, and after a little haggling with European Commission, Europe’s top antitrust watchdog, Volvo finally belongs to Geely. In a deal worth $1.5 billion, Geely Holding Group has successfully completed the acquisition of the Swedish brand, Volvo. This is not only an unusually big deal for a private Chinese company, but also the biggest foreign auto acquisition for China.

But big challenges lie ahead for the ambitious Chinese car maker. Volvo is a global brand, whereas Geely hardly enjoys any kind of recognition in the international market. Industry analysts are already predicting a gloomy future for Geely, saying that integrating the corporate culture of two companies, which are poles apart, would be a tough task for the Chinese company.

Geely has announced that it paid $1.3 billion in cash plus a $200 million note — less than the $1.8 billion price that was initially announced in March due to changes in pension obligations and working capital.

“This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design,” said Geely founder and chairman Li Shufu in a statement.

Beijing has been egging on Chinese companies to expand internationally, taking advantage of the global crises to acquire assets at much lower prices. Till date, the biggest acquisitions have been by government companies in the energy and mining industries.

Zhang Xin, industry analyst for Guotai Junan Securities in Beijing, says that Geely would face a long struggle in reviving the loss-making Volvo. “Why would a company suddenly make money by simply replacing a boss?” Zhang said. “I don’t hold high expectations for Geely. They still have a long way to go.” Li also mentioned that, under the Chinese ownership, Volvo will gain a new foothold in the U.S. and European markets and expand in China and other emerging markets.

Geely is expected to cough up a grand sum, up to $900 million, if it wants to return Volvo to profitability. Volvo’s has been facing a lot of problems mainly due to high research and development costs, while producing very few vehicles compared to competitors like Daimler AG and BMW AG.

Geely has revealed that Volvo will keep its headquarters and manufacturing presence in Sweden and Belgium and its board will have autonomy to execute its strategic plans.

The privately owned Geely has built a business in the Chinese market by selling cars, motorcycles and scooters with little government support. The deal would catapult Geely in the main league of big players in China, which is the world’s biggest auto market.

Ford bit more than it could swallow when it acquired Volvo in 1999 for $6.45 billion. And since then, it has been looking to unload the extra baggage to raise cash and focus on its two remaining core brands.

In similar circumstances, Ford sold its Jaguar and Land Rover brands to India’s Tata Motors Ltd. in June 2008 for $1.7 billion, and it sold Aston Martin to a private equity group in 2007 for $931 million. Ford also plans to stop producing its Mercury brand by the end of this year.