- Dec 23, 2009
BREAKING: Ford says it has come to terms with Geely on Volvo sale
Ford Motor Company has just announced that all major terms relating to the sale of Volvo have been settled between Ford and Zhejiang Geely Holding Group Company Limited. That doesn't mean that all the Ts have been crossed on the deal, but it does indicate that Geely has met all of Ford's terms for the sale to be complete. Ford has issued a press release stating that a definitive sale agreement will be signed in the first quarter of 2010, while the final sale won't take place until Q2.
Earlier in the month, former Volvo executives sent a letter to Ford Chairman Bill Ford, Jr. voicing their concern that Geely doesn't have the necessary resources to support Volvo. Not so, according to Ford's press release. The Blue Oval states "the prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise." And even though Ford will likely soon be handing over the keys to Volvo to a Chinese automaker, the company still intends to work closely with the Swedish automaker post-sale. That makes sense considering the fact that all Volvo products share platforms and components with Ford-branded cars and crossovers.
The sale will also go far in achieving Ford's goal of divesting itself of its non-core assets so the Dearborn, MI-based automaker can concentrate on matters closer to the Blue Oval's heart. Follow the jump to study Ford's brief press release. Thanks to everyone for the tips!
DEARBORN, Mich., Dec. 23, 2009 – Ford Motor Company [NYSE: F] confirmed today that all substantive commercial terms relating to the potential sale of Volvo Car Corporation have been settled between Ford and Zhejiang Geely Holding Group Company Limited.
While some work still remains to be completed before signing – including final documentation, financing and government approvals – Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals.
The prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement its core ONE Ford strategy.
While Ford would continue to cooperate with Volvo Cars in several areas after a possible sale, the company does not intend to retain a shareholding in the business post-sale.
More details will be made available once the expected definitive sale agreement is signed in the first quarter of 2010.