The final numbers in the purchase by Zhejiang Geely Holding Group Co. of Volvo Cars from Ford Motor Co. have been revealed five moths after the original purchase was announced.According to industry reports, Geely is paying Ford $1.5 billion — $1.3 billion in cash and $200 million in a loan note. In a report in the Detroit News, Geely may pay more after reviewing the Swedish carmaker’s accounts.
The original price of $1.8 billion was agreed upon in March.
The Chinese carmaker confirmed Stefan Jacoby, former head of Volkswagen AG’s U.S. operations, will be Volvo Cars’ chief executive, replacing Stephen Odell, who becomes chairman and CEO of Ford of Europe.
Li Shufu, founder of Geely and new chairman of the board of Volvo Cars, and Ford Chief Financial Officer Lewis Booth signed the agreement in London.
Ford Chief Executive Alan Mulally expressed confidence in Volvo’s prospects, noting the carmaker had returned to profit after a restructuring.
“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,” Mulally said.
He already has sold the other premium European brands — Jaguar, Land Rover and Aston Martin — that his predecessors acquired in the 1980s and 1990s.
The Dearborn automaker paid $6.45 billion for Volvo Cars in 1999 in a deal that was considered one of the most successful cross-border partnerships.
China’s automakers are struggling to keep pace with the growth of their domestic market, the world’s largest.
In the first seven months of 2010, Chinese auto sales were up 28.6 percent at 8.2 million vehicles, the Xinhua News Agency reported.
Zhejiang Geely says Volvo will remain a separate carmaker within the group.
Volvo sold 191,832 cars in the first half of this year, a 20 percent increase from the same period last year. In China, Volvo’s fourth-biggest market, sales jumped 88 percent to 15,497 cars, helped by the introduction of a long-wheel-base version of the S80 sedan, the S80L, sold only in China, according to Bloomberg News.
Article Last Updated: August 3, 2010.
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A sports, travel and business journalist for more than 45 years, James has written the new car review column The Weekly Driver since 2004.
In addition to this site, James writes a Sunday automotive column for The San Jose Mercury and East Bay Times in Walnut Creek, Calif., and a monthly auto review column for Gulfshore Business, a magazine in Southwest Florida.
An author and contributor to many newspapers, magazines and online publications, James has co-hosted The Weekly Driver Podcast since 2017.