STOCKHOLM - Ford Motor Co. said Wednesday it was close to selling its money-losing unit Volvo China's Geely Automobile and expects a final agreement in the first quarter of 2010.
Ford said in a statement that "all essential commercial terms of the possible sale of Volvo Car Corporation has been honored." Ford Geely Automobile chosen as preferred bidder for Volvo in October.
Working with finance and government approvals are not yet complete, Ford said, adding that it expects the deal to close "in the second quarter of 2010, subject to regulatory approvals." The announcement did not disclose the size of the offering of Geely Automobile.
In a statement, Geely Automobile said its negotiations with Ford had deepened since October and had also "constructive" talks with the leadership of Volvo and the Swedish trade union and government officials.
Ford bought Volvo in 1999 for one billion U.S. dollars 6:45. I wanted to download the Swedish automaker since last year to raise money and focus its efforts on three main brands: Ford, Lincoln and Mercury.
For 10 years, Ford and Volvo have common security and other technologies. For example, the Ford Taurus sedan, based on foundation of Volvo. Any agreement with Geely Automobile is expected to contain information about sharing intellectual property and technology.
"The sale ensures future Volvo has the resources, including the necessary investments to further strengthen the company and ensure its global franchise, while Ford continued to focus on its core and implement Ford's strategy UNO" he said in statement.
He said Ford hoped to work with Volvo cars for sale, but does not intend to retain a stake in Volvo.
"If you signed a definitive purchase agreement, as the world famous Swedish brand, Volvo will continue to lead the development of technology in the world automobile safety and environmental protection, and soon will expand its unique competitive position in the market Chinese, "said Geely Automobile.
Volvo spokeswoman Maria Bohlin called the message "a step in the process" but said the deal "is not yet complete."
Auto analyst Matt Carlson estimated street price of Volvo at between $ 2 billion-$ 2.3 million and Geely Automobile said an acquisition would be good for Volvo.
"Volvo will have a new owner with a lot of money, which I hope will leave alone because they often know more about the development of vehicles, purchase of vehicles and cars," said Carlson, Gothenburg Management Institute.
He added, Volvo will also receive a boost market access of automobiles in rapidly growing China.
EIJING, Dec. 23 - Chinese automakers Geely Automobile and BAIC went ahead with plans to exploit the technology of Ford and General Motors in crisis' Swedish Volvo and Saab in a bid to become global industry players.
U. S. Ford Motor said in a statement today that it has reached agreement on all essential commercial terms of an agreement to sell its Volvo Car Corporation of China Zhejiang Geely Automobile Holding Group, parent of Geely Automobile Auto.
"That although some work still to be completed before signing ... Ford, Geely Automobile expects a final sale agreement will be signed during the first quarter of 2010," Ford said, adding that the agreement was concluded in the second quarter.
The U.S. estimated 1.8 billion U.S. dollars (RM6.1 billion) would be the biggest overseas acquisition by a Chinese automaker. It follows the recent acquisition of Beijing Automotive Industry Holding Co. assets of the Swedish unit of General Motors Saab.
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