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Geely Buys Volvo from Ford for $1.8 Billion Dollars
Zhejiang Geely Holding Group signed a deal worth 1.8 billion U.S. dollars to buy Ford's Volvo Cars unit, allowing the Chinese automaker to enter European and North American car market.Under the deal, Geely will pay a $200 million note and $1.6 million in cash for Ford's unprofitable Volvo unit, allowing Geely to own 100 percent of Volvo Cars and its related assets.
Ford expects the deal to complete in the third quarter, once regulatory matters have been settled.
Ford will continue to cooperate with Volvo Cars in several areas after the sale has been completed in order to ensure a smooth transition, but will not retain any ownership in the Volvo Cars business.
Following completion of the sale, Ford will continue to supply Volvo Cars with, for differing periods, powertrains, stampings and other vehicle components.
As part of the sale, Ford also has committed to provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period to ensure a smooth separation process.
Geely Chairman Li Shufu said Volvo will retain its Swedish identity and strategic independence. Volvo's management team will continue to be based in Gothenburg. But the Chinese car maker wants Volvo to boost its output, and will use Geely's experience and distribution network in China to help it achieve that aim.
Volvo, which has about 22,000 workers around the world including 16,000 in Sweden, was purchased by Ford in 1999 for about 6.4 billion dollars.
But Ford has been attempting to sell Volvo since late 2008, due to its poor market performance. Geely was named as the preferred bidder for the Swedish subsidiary in October 2009.
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