Volvo sale to complete in August
30th Jul 2010 7:00 am
Ford will sell Volvo to Chinese company Geely by the first week of August.
Ford plans to complete the sale of Volvo to Chinese company Zhejiang Geely Holding Group in the first week of August.
China’s Ministry of Commerce, the government regulator of major acquisitions, has cleared the sale which was first agreed in March this year. Geely shares have soared 11 per cent in response. Volvo is to be sold for $1.8 billion (Rs 8,100 crore), less than a third of what Ford paid for the company in 1999.
Once the sale is complete, Ford chief executive Alan Mulally will have sold all the company’s European brands, including Jaguar, Land Rover and Aston Martin, since arriving at the company in 2006. Post transaction, Geely will own Volvo outright, with Ford retaining no shareholding in the company.
However, Ford will continue to supply Volvo with powertrains, stampings and other vehicle components for unspecified periods. 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 an unspecified transition period.
Geely will invest £586 million (Rs 3,990 crore) of operating capital into Volvo when its purchase is complete, its chairman has announced. Geely’s London spokesman has, however, declined to comment on the timing of the deal.