Posts Tagged ‘ford geely’

Volvo Takeover by Chinese Zhejiang Geely is Final

Ford takes a huge loss on its Swedish auto investment. Volkswagen of America executive Stefan Jacoby becomes CEO.

by on Aug.02, 2010

Jacoby has worked for a German company in Asia, VW, and an Asian company in Europe, Mitusbishi.

Zhejiang Geely Holding Group Co., Ltd. (“Geely Holding Group”) today announced it has completed the acquisition of 100% of Volvo Car Corporation from Ford Motor Company.

Geely, a privately held company, also announced that Stefan Jacoby, the Chief Executive of Volkswagen Group of America, would become President and Chief Executive Officer of Volvo Cars, replacing Stephen Odell, who returns to Ford to run its European operations. The Jacoby move comes as a blow to VWoA as it is in the process of an ambitious expansion that includes a new plant in Tennessee. Both the VW group and the VW brand in North America are now being run by interim executives.

Completion of the Volvo acquisition, which follows more than a year of talks between Geely and Ford, was marked at a signing ceremony in London attended by Li Shufu, Chairman of Geely Holding Group and Lewis Booth, Chief Financial Officer at Ford.

The total purchase price for Volvo and related assets from an agreement signed in March 2010 was $1.8 billion, including a $200 million note and the balance in cash. 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 purchase price adjustments later this year. The final accounting is expected to result in additional, unspecified, proceeds to Ford, the Dearborn- based company said in a statement.  Ford has roughly $27 billion in debt on its books.

Geely issued the note and paid cash for Volvo Cars with financing from Chinese institutions and its own balance sheet as well as international capital market resources. The closing consideration reflects adjustments for pension obligations and working capital.

This formally ends what has turned out to be for Ford shareholders a very expensive foray into the Swedish car business, which started in 1999 when Ford bought Volvo for $6 billion and Geely was just 13 years old. Billions more were then invested in the loss-making company. Volvo sold about 334,000 cars globally in 2009, 22,000 in China, down from a record 460,000 in 1997. In order to survive Volvo needs to roughly triple current sales. (See Ford Takes Huge Loss on Volvo Sale to Chinese)

Under Chinese ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium.

Ford will not retain any ownership Volvo – from 100% to zero in a little more than a decade. It will supply component parts until the now common Ford-Volvo platforms are phased out by Geely. Volvo was the last vestige of the now defunct Premier Automotive Group, which also included Aston Martin, Jaguar and Land Rover.

“This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars. This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets,” said Li Shufu.


Jacoby will join the board of Volvo Cars, chaired by Li Shufu. The board will comprise several new directors including Hans-Olov Olsson, a former President and Chief Executive of Volvo Cars and a former Chief Marketing Officer of Ford, who will become Vice-Chairman of the board.


Chinese Give Final Approval to Volvo Sale

Final obstacle gone, $1.7 bil deal now appears complete.

by on Jul.29, 2010

China has given approval to the purchase of Volvo from Ford by Geely, permitting the $1.7 bil deal to finally be completed.

With the approval of the Chinese government now in hand, it appears Ford Motor Co. and Geely Holding Group can consummate the sale of Swedish automaker Volvo.

The U.S. and Chinese firm agreed to the $1.7 billion deal in June but had to wait for government regulators in the U.S., Europe and China to give their approval before the transfer of Volvo could be completed. (See Li Shufu to Become Chairman of the Board at Volvo and Ford Takes Huge Loss on Volvo Sale to Chinese)

China’s Commerce Ministry gave what appears to be the final approval today, according to the Associated Press, which quoted an unnamed government official saying, “This was the final stage.  There are no conditions attached.”

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If so, the official transfer of Volvo could happen quickly, ending a decade-long effort by Ford to blend Volvo into its global product development process.  The goal yielded mixed results, with Volvo providing some of the basic platforms and safety technology that will continue to be used by Ford in the years ahead.  But the Swedish maker itself struggled under Ford’s stewardship and shortly after he joined the U.S. maker, four years ago, CEO Alan Mulally sent a rescue team to Volvo headquarters to try to turn things around – or set the company up for sale.


Ford Takes Huge Loss on Volvo Sale to Chinese

Zhejiang Geely will purchase 100% of Volvo later this year.

by on Mar.28, 2010

More than a $4 billion loss, not including billions more invested in plants and products.

Ford Motor Company today confirmed it has entered into a “definitive agreement” to sell Volvo Car Corporation and related assets to Zhejiang Geely Holding Group Company Limited.

The purchase price for Volvo Cars and related assets – mostly intellectual property – is $1.8 billion, which will be paid with a note for $200 million, and the balance in cash.

Thus ends what has turned out to be for Ford shareholders a very expensive foray into the Swedish car business, which started in 1999 when Ford bought Volvo for $6 billion. Billions more were then invested in the loss making company. Volvo sold about 334,000 cars globally in 2009, 22,000 in China,  down from a record 460,000 in 1997.

Ford will not retain any ownership whatsoever in Volvo when the transaction is completed – from 100% to zero in a little more than a decade. Volvo was the last vestige of the now defunct Premier Automotive Group, which also included Aston Martin, Jaguar and Land Rover.

Ford said in a statement that the cash portion of the purchase price would be adjusted at the closing with modifications for pension deficits, debt, cash and working capital, the net effect of which “could be a significant decrease in the cash proceeds” to Ford.   (more…)

Volvo Sale “Days” Away, Ford Confirms

Sale price likely less than one-third what Ford paid.

by on Mar.26, 2010

By the time the 2011 Volvo S60 hits the street, the Swedish automaker will likely be reporting to a new owner -- in China.

Ford Motor Co. officials say they expect to complete the $1.8 billion sale of Volvo to China’s Zhejiang Geely Holding Group Co. “in the next few days.”

Speculation now is the deal could be signed in Sweden as soon as March 28. Chinese Vice President Xi Jinping will be in Sweden this weekend and is scheduled to visit Gothenburg, where Volvo is based.

Volvo and Geely were scheduled to complete the deal in February to coincide with the Chinese New Year but the deal still wasn’t finished in time, with the Asian maker reportedly short of the cash it needed.

Geely, however, has now lined up the financing required and Ford’s lawyers have completed their review of the documents involved in closing the deal.

Ford originally acquired Volvo for $6 billion in 1999. As it turned out, Ford purchased the Swedish carmaker at the very top of the market for automotive assets.

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Volvo never produced the kind of profits required to earn back that investment, and in recent years has been barely treading water, prompting Ford CEO Alan Mulally to peddle Volvo as part of a general house cleaning at the U.S. maker – which had previously sold off the rest of its once-promising Premier Automotive Group.


Change Coming for Volvo – But How Much?

Chinese owners certain to play with “new toy.”

by on Jan.18, 2010

Even after a takeover by Geely, models like the XC70 will remain the heart of the Volvo line-up, asserts CEO Stephen Odell.

Like a kid after Christmas, expect to see the Chinese automaker Geely “play” with its “new toy,” should its planned acquisition of Volvo Cars go through, said the Swedish maker’s top executive.

New production operations in China, as well as a Asian design and engineering center are most likely to follow Ford’s planned sale of its Volvo subsidiary, according to CEO Stephen Odell.  But the long-time Ford executive said he believes Geely will largely hold course with its new global brand.

Late last month, Ford confirmed long-standing rumors, revealing that it had reached agreement, “on all substantive terms,” with Zhejiang Geely Holding Group, one of the strongest and most ambitious of China’s independent automakers.

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The proposed sale should be completed by the second quarter of this year, Odell predicted, during an interview with  The transfer would come at a critical time for Volvo, which has been hit hard, over the last several years, by the global recession and problems more particular to the brand.


A Happy Turn for a Saab Story?

GM reportedly extending deadline for potential Saab buyer.

by on Dec.30, 2009

The fate of an all-new version of the Saab 9-5 sedan will depend on whether Spyker can raise the money to purchase the brand from GM.

The troubled Swedish automaker, Saab, has been given an 11th-hour reprieve, though it’s far from certain the brand has been saved.

Numerous reports out of Europe – supported by American sources – indicate that General Motors has agreed to extend its self-imposed December 30th deadline for shuttering Saab, one of four brands it said it would either sell or close after emerging from bankruptcy protection last July.

The initial funding plan for Spyker’s acquisition of Saab has fallen through, but the Netherlands-based company is reportedly seeking another line of financing; and GM is giving the carmaker time to pull that together.


“The December deadline has been lifted and the final offer from Victor Muller [chief executive of Spyker] must be made by 7 January now,” a spokesman for GM of Europe told the British newspaper, The Guardian, which added that raising the necessary cash appears to be Spyker’s only obstacle, at this point. (more…)