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Ford Sale of Volvo Expected to be Done Next Week

July 29, 2010
2 min to read


Ford Motor Co. plans to complete the sale of Volvo Cars to Zhejiang Geely Holding Co. next week, marking the biggest acquisition of a global brand by a Chinese company, people familiar with the plans told The Detroit News.


Ford is selling Volvo to Geely for $1.8 billion, less than a third of what it paid for the Swedish carmaker in 1999, as part of the Dearborn automaker's strategy to focus on its blue-oval brand.

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Ford and Geely have been aiming to close the deal next week.


Li Shufu, founder and chairman of Zhejiang Geely, will be the chairman of a new board for Volvo Car Corp. after the deal is completed, Geely said this month. A former Volvo chief executive, Hans-Olov Olsson, will be vice chairman.


But it has given no indication whether negotiations to hire Stefan Jacoby, most recently head of Volkswagen's U.S. operations, to be Volvo's next chief executive are nearing completion.


Volvo's current CEO Stephen Odell will leave the company to become chairman and CEO of Ford of Europe.


The Volvo sale concludes Ford CEO Alan Mulally's strategy to shed the European luxury marques purchased by his predecessors.

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Since Mulally's arrival from Boeing Co. in 2006, Ford has sold Aston Martin, Land Rover and Jaguar, which it acquired in 1989 as the first of a stable of premium brands that failed to generate the profits the automaker expected.


Of Ford's European brands, Volvo provided the most benefits to Ford, and the acquisition was considered among the most successful in an industry littered with unhappy deals.


Geely declined to comment on the timing of the completion.


Ford will continue to supply Volvo with engines, transmissions and other components. It also agreed to offer engineering and technology support, and access to tooling for common components for an unspecified period.

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