Ford has officially announced today it has entered into a definitive agreement to sell Volvo and related assets to Zhejiang Geely Holding Group Company Limited. The Dearborn automaker said that the sale is expected to close in the third quarter of 2010, and is subject to customary closing conditions, including receipt of applicable regulatory approvals.
Geely will cash out a total of $1.8 billion for Volvo and its related assets. The amount will be paid in the form of a note in the amount of $200 million and the remainder in cash.
“Volvo is a great brand with an excellent product lineup. This agreement provides a solid foundation for Volvo to continue to build its business under Geely”s ownership,” said Alan Mulally, Ford”s president and CEO. “At the same time, the sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world.”
Ford said that it will continue to work with Volvo in several areas after the sale to ensure a smooth transition, but will not keep any ownership in the business. As a part of the sale, Ford will continue 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.
– By: Omar Rana