Ford Motor Company August 2 announced it has completed the sale of Volvo Car Corporation and related assets to the Zhejiang Geely Holding Group Company Limited.
The total purchase price for Volvo and related assets set forth in the agreement signed in March 2010 was $1.8 billion, including a $200 million note and the balance in cash, with the cash portion subject to customary purchase price adjustments at closing. Pursuant to the terms of the agreement, Geely today issued the note and paid $1.3 billion in cash to complete the sale.
The estimated purchase price adjustments used at closing are expected to be finalized and settled following final true-up of the purchase price adjustments later this year.
“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 will continue to cooperate with Volvo in several areas to ensure a smooth transition, but has not retained any ownership in the Volvo business. Ford will continue to supply Volvo with powertrains, stampings and other vehicle components. Ford also has committed to provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period.
Agreements between Ford and Geely govern the use of intellectual property; these agreements will allow both Volvo and Ford to deliver their business plans and establish the proper use of each other’s intellectual property.
As previously announced, Stephen Odell, CEO of Volvo Car Corporation, is returning to Ford as group vice president and Chairman and CEO of Ford Europe. Stuart Rowley, CFO of Volvo Cars, is returning to Ford as chief financial officer, Ford Europe.
For more information regarding Ford’s products, please visit www.ford.com.