This paper examines the value creation on the acquisition of Volvo Car
Corp by Zhejiang Geely Holding Group.  The acquisition of Volvo by Geely
became an interesting topic to discuss since it was the first time in
automotive industry that a Chinese company acquired an international
company with a considerably high transaction amount. The paper examines
the short term value creation using event study to calculate abnormal
returns of each company’s stock during the announcement period and
measuring the significance of the cumulative abnormal return.  The
findings are consistent with previous studies over the years which have
shown that most acquisitions fail to add value for shareholders in the
acquiring company. The paper discusses the broad managerial implications
of the findings this paper discussion on marketing aspect after the
acquisition by integrating two different brand perceptions.