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Ford finalizes deal to sell Volvo to Geely for $1.8 billion

Sam Abuelsamid — Sun, 28 Mar 2010 09:55:00 EST

At press conference in Gothenburg, Sweden today, Ford executive vice president Lewis Booth and Geely chairman Li Shufu announced that the companies have reached a final deal to sell Volvo to the Chinese automaker. The final purchase price is $1.8 billion, which includes some of Volvo's intellectual property and its other physical assets.

Volvo will be 100-percent owned by Geely, and Ford will not retain any equity stake. Because of the component sharing between existing Volvo vehicles and Ford models, Ford has agreed to continue supplying powertrains, stampings and other systems to Volvo for an undisclosed transition period. Perhaps the most difficult aspect of this deal is the intellectual property situation. Volvo will be granted licenses to use some Ford-owned technology and will have the ability to sub-license some technology to third parties, including Geely.

Li committed to keeping the Volvo brand separate from Geely while expanding its global reach, particularly in China. Li also stated that Volvo would maintain a manufacturing footprint in Sweden.

The sale is expected to close in the third quarter of this year, pending regulatory approvals. Unlike the aborted sale of Hummer, the Chinese government will likely approve this deal since Geely is already in the car business. The official press release is included after the jump.

[Source: Ford]

Continue reading Ford finalizes deal to sell Volvo to Geely for $1.8 billion

Ford finalizes deal to sell Volvo to Geely for $1.8 billion originally appeared on Autoblog on Sun, 28 Mar 2010 09:55:00 EST. Please see our terms for use of feeds.

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Geely: Volvo talks have hit snag, still expect purchase to happen

Chris Shunk — Tue, 23 Mar 2010 08:01:00 EST

Filed under: Ford, Volvo, Geely

Ford has been attempting to sell Volvo since 2008, and Zhejiang Geely Holding Group has been the lead bidder for almost as long. But for a multitude of reasons the deal just keeps getting drawn out. A recent report from Automotive News shows that the folks in China may be getting a little impatient with the long and likely arduous process. AN quotes a Wall Street Journal report claiming Geely Chairman Li Shufu says the Volvo deal has hit a snag, but the chairman reportedly was click to point out that his company was "ready to deal." Further, Shufu reportedly told a reporter that the negotiations are continuously changing, adding, "If the deal fails, the problem is not on our side. We have not violated any part of the agreement."

Earlier reports showed that a deal between Ford and Geely could become signed into reality by the end of March, with regulatory filings complete by the end of June. A Geely spokesperson reportedly told Reuters that the agreement is still on track for the end of March, and the company isn't specifying what issues may be popping up during negotiations.

[Source: Automotive News - Sub. Req.]

Geely: Volvo talks have hit snag, still expect purchase to happen originally appeared on Autoblog on Tue, 23 Mar 2010 08:01:00 EST. Please see our terms for use of feeds.

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BREAKING: Ford says it has come to terms with Geely on Volvo sale

Chris Shunk — Wed, 23 Dec 2009 09:33:00 EST

Filed under: China, Ford, Volvo

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!

[Source: Ford]

Continue reading BREAKING: Ford says it has come to terms with Geely on Volvo sale

BREAKING: Ford says it has come to terms with Geely on Volvo sale originally appeared on Autoblog on Wed, 23 Dec 2009 09:33:00 EST. Please see our terms for use of feeds.

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Ford officially confirms China's Geely as preferred bidder for Volvo

Sam Abuelsamid — Wed, 28 Oct 2009 12:58:00 EST

Filed under: China, Ford, Volvo, Geely

Volvo S60 concept - click above for high-res image gallery

It's been rumored for months Chinese automaker Geely had the best shot at picking up the Volvo brand from Ford, and today, Dearborn has finally confirmed it. Geely was named as the preferred bidder this morning and the Blue Oval is proceeding with negotiations. However, this is not going to be an easy deal to close. Ford doesn't want to keep any stake in the Swedish company, although it does hope to continue some product cooperation.

In spite of the lack of shareholding, Ford doesn't want Volvo to wither on the vine and wants whoever buys it to have the resources to make it a going concern - unlike what happened when BMW dumped Rover. Perhaps the toughest nut to crack will be intellectual property concerns. Any time a sale like this happens, the seller is be concerned about leaving too much information lying around, and that concern is understandably amplified when dealing with an up-and-coming Chinese company. There is no word on when a deal might be closed, so in the meantime, busy yourself with the official release after the jump.

Gallery: Detroit 2009: Volvo S60 Concept

[Source: Ford]

Continue reading Ford officially confirms China's Geely as preferred bidder for Volvo

Ford officially confirms China's Geely as preferred bidder for Volvo originally appeared on Autoblog on Wed, 28 Oct 2009 12:58:00 EST. Please see our terms for use of feeds.

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REPORT: Geely's plans to buy Volvo from Ford unravelling over intellectual property concerns?

Chris Shunk — Fri, 23 Oct 2009 16:00:00 EST

Filed under: Ford, Volvo, Earnings/Financials, Geely

Ford has been trying to offload the Volvo brand since December of 2008, but after years of rumors and speculation those 10 months feel more like a decade. China's Geely has been speculated as the number-one bidder for the Blue Oval's Swedish luxury brand, but a report by Bloomberg asserts that the long-awaited accord could be shelved due to concerns over Ford's intellectual property.

Because Volvo is so tightly integrated into Ford's product development, any buyer of the safety-minded car maker would have inside knowledge of the Blue Oval's future product plans and access to its latest and greatest technology. The buyer would also have direct access to Ford's vehicle architectures, since so many are shared between itself and Volvo. If Geely does in fact purchase Volvo, those platforms, which pass both European and U.S. crash test standards with flying colors, it could give China's largest automaker a better chance of entering the coveted U.S. market. And helping Chinese automakers enter the States probably isn't at the top of the list of things Ford wants to do right now.

U.S. and European automakers have had their hands full in attempting to curb China's lax intellectual property rules. Some vehicles built by Chinese automakers and sold in the land of the Great Wall are nothing more than carbon copies of vehicles from American., Japanese and European automakers... save for a new logo. Ford is also dealing with the case of Xiang Dong Yu, an ex Ford engineer who stole 4,000 sensitive and confidential documents from the Dearborn, MI-based automaker. The sticky-fingered engineer reportedly pilfered the documents in an effort to get a job at Shanghai Automotive but he was instead hired by Bejing Automotive.

The other issue Ford could be facing is the bargain-basement price tag Volvo is rumored to be offered at due to years of recessing sales volume and mounting losses. Ford purchased Volvo in 1999 for over $6 billion, but sources familiar with the brand's sale estimate that the Swedish automaker could now fetch as little as $2 billion. While that sum is nothing to sneeze at, Ford could be better off waiting until the automotive market heats back up gain. The new XC60 crossover has helped curb Volvo's sales woes here in the U.S. to the point that the Swedish Automaker realized a 16% sales climb versus last September. Next year's intro redesigned S60 coupled with several mid-cycle face lifts could continue to help Volvo's short-term prospects.

[Source: Bloomberg | Photo: Sven Nackstrand/AFP/Getty Images]

REPORT: Geely's plans to buy Volvo from Ford unravelling over intellectual property concerns? originally appeared on Autoblog on Fri, 23 Oct 2009 16:00:00 EST. Please see our terms for use of feeds.

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Ford wants $6 billion for Volvo

Michael Harley — Thu, 04 Dec 2008 13:01:00 EST

Filed under: Europe, Ford, Volvo

Ford bought Volvo for $6.4 billion back in 1999. Now, a decade later, unconfirmed reports say the automaker is asking nearly the same amount -- $6 billion -- for the Swedish brand.

Ford may sell Volvo to demonstrate active steps to cut costs (a critical move as Mulally is in Washington asking Congress for financial assistance as you read this). Although it's a buyer's market, Volvo isn't exactly the hottest catch. Like everyone else, the automaker is struggling in today's market as reported sales in the third-quarter were down 24%. Volvo has cut thousands of jobs, and has even been in recent talks with the Swedish government about financial support. Potential buyers of Volvo include SAIC Motor Corp., China's largest automaker, and Hyundai Motor Co., from South Korea. Another option would be for the Swedish government to become the temporary owner until a suitable industrial buyer is found, but we think that has the same chance as the Detroit 3 being federalized.

[Source: Bloomberg]

Ford wants $6 billion for Volvo originally appeared on Autoblog on Thu, 04 Dec 2008 13:01:00 EST. Please see our terms for use of feeds.

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