Geely buys Volvo from Ford

Geely buys Volvo from Ford

Ford Motor Company has announced it has entered into a definitive agreement to sell Swedish subsidiary Volvo Car Corporation and related assets to the Chinese Zhejiang Geely Holding Group Company Limited, maker of Geely automobiles. The sale is expected to close in the third quarter of 2010, and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

The purchase price for Volvo Cars and related assets (primarily intellectual property) is US$ 1.8 billion, which will be paid in the form of a note in the amount of US$ 200 million, and the remainder in cash. The cash portion of the purchase price will be adjusted at close for customary purchase price adjustments relating to pension deficits, debt, cash and working capital, the net effect of which could be a significant decrease in the cash proceeds to Ford.

Ford will continue to co-operate with Volvo Cars in several areas after the sale has been completed in order to ensure a smooth transition, but will not retain any ownership in the Volvo Cars business.

Following completion of the sale, Ford will continue to supply Volvo Cars with, for differing periods, powertrains, stampings and other vehicle components.

As part of the sale, Ford also has committed to provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period to ensure a smooth separation process.

Ford and Geely have established agreements to govern the use of intellectual property; these agreements will allow both Volvo and Ford to deliver their business plans and provide appropriate safeguards against misuse. These agreements also will allow Volvo Cars to grant sublicenses to certain portions of Ford’s intellectual property used by Volvo Cars to third parties, including Geely.

Geely will therefore use this opportunity to improve their own cars.

What do you think?



  1. This is good for the Chinese, I am sure in 10 years the Chinese car industry will evolve and prosper. Volvo also is a world leader in building heavy machines and other equipments.

    Too bad for Volvo, I wonder if Sweden will allow this transfer of technologhy to China!!

    Why no one in the Arab World tried to buy any of these troubled companies? 1.2 billion is nothing compared to the value of this technology and it could start our own car industry.

    Rare chance wasted no doubt!!
    I guess India also missed on this chance.
    Good job for the Chinese.

  2. 1.2 billion is almost the cost of 3 or 4 towers in Dubai!
    we could have bought volvo and cancelled 3 or 4 projects.
    Just a thought.

  3. The point is not about the money, rather it would be more of an already set-up organization with atleast some know-how of the automotive industry. And unfortunately, ME does not have any such set-up. Defnitely a lost opportunity for India, but then again apart from Tata, India does not have any other BIG auto specific companies with international interests. And Tata just purchased jaguar / Rovers. So I dont think they would have had money for another purchase.

  4. hmmm…I do hope this isn’t your idea of an early April fool Mash…

  5. @Hawkeye
    haha nice comment 😉

    let’s wait and see guys… they might build better cars while they are free from restrictions(Ford)!! 🙂 give them a break..

  6. Well if you think Ford were restricting them; then wait for the Chinese and their ways of building cheaper cars!

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