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

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.

Source: Indiacar.com Source : http://www.autoblog.com/ (3/28/2010)