FoMoCo announced today that it has completed the sale of Volvo Car Corporation and related assets to the Zhejiang Geely Holding Group Company Limited. Geely purchased Volvo and its assets for a total of $1.8 billion, including a $200 million note and the balance in cash.
According to the terms of the agreement signed in March 2010, Geely today issued a note and cashed out $1.3 billion to officially complete the sale.
“Volvo is an excellent brand with a strong product line, and it has returned to profits after a successful restructuring. We are confident Volvo has a solid future under Geely”s ownership,” said Alan Mulally, Ford”s president and CEO. “At the same time, the sale of Volvo will allow us to sharpen our focus on 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 it will continue to cooperate with Volvo to ensure a smooth transition but will not retain any ownership in the brand. The Dearborn automaker will continue to supply the Swedish/Chinese company with powertrains, stampings and other vehicle components. Engineering support, information technology, access to tooling for common components, and other selected services will be provided for a transition period.
Volvo will be losing two of its major executives in the process. Stephen Odell, CEO of Volvo, is returning to Ford as group vice president and Chairman and CEO of Ford Europe. Stuart Rowley, CFO, is returning to Ford as chief financial officer, Ford Europe.
– By: Omar Rana