Volvo Car Corporation and related assets have been sold to the Zhejiang Geely Holding Group Co. Ltd., Ford Motor Co. announced Monday.
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. Geely issued the note Aug. 2 and paid $1.3 billion in cash to 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 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."
Under the new ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium; and its management will have the autonomy to execute on its business plan under the strategic direction of the board.
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, for differing periods, 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.
"The Volvo team has made tremendous progress in restructuring its business and delivering results during the sale process," said Lewis Booth, Ford executive vice president and chief financial officer. "We believe this agreement will provide Volvo with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future. We wish Volvo's management team, employees and new owners every success for the future.
"Ford appreciates the support of the Volvo management team, Volvo's labor unions and the government officials in Sweden and China during this transaction," Booth added.
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.
Geely also announced that Stefan Jacoby, the chief executive of Volkswagen Group of America, would become president and chief executive officer of Volvo Cars.
Along with the new management team at Volvo Cars, Geely also named the full board of directors for the Swedish carmaker, comprising:
Li Shufu (Chairman)
Hans-Olov Olsson (Vice-Chairman)
Freeman H. Shen
Dr. Herbert Demel
Lone Fonss Schröder
Winnie Kin Wah Fok
The board, which will include three labor representatives nominated by unions at Volvo Cars, will assume its duties on completion of the transaction.