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Beijing gives Geely go-ahead to buy Volvo Car unit.

July 29, 2009
Geely Holding Group has been given the go-ahead by China's main economic planning agency on its bid for Ford Motor Co.'s Volvo unit, the Shanghai Securities Journal reports Wednesday.

The report said Geely has received the confirmation letter from the National Development and Reform Commission on oversea acquisitions, becoming the only Chinese automaker that has won official confirmation on such deals.

The Wall Street journal reported in mid-July that Geely is expected to submit a final bid later this month with an offer anticipated to be around $2 billion, citing people familiar with Geely.

The people said the private Chinese automaker has been working for almost three years on its takeover plan for Volvo, and it has hired consultants to advise it and a veteran Chinese finance executive to spearhead the deal.

Another Chinese company, Changan Automobile Group, Ford's manufacturing partner in China, said it would not run for Volvo because of unspecified conditions.

http://autonews.gasgoo.com/auto-news/1011513/Beijing-gives-Geely-go-ahead-to-buy-Volvo-Car-unit.html
 

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Ford has reached a final deal to sell Volvo to Geely for $1.8 billion.

http://www.autoblog.com/2010/03/28/ford-finalizes-deal-to-sell-volvo-to-geely-for-1-8-billion/

FORD REACHES AGREEMENT TO SELL VOLVO CARS AND RELATED ASSETS TO GEELY; SALE EXPECTED TO CLOSE IN THIRD QUARTER


DEARBORN, Mich., 28, 2010 – Ford Motor Company [NYSE: F] today announced it has entered into a definitive agreement to sell Volvo Car Corporation and related assets to Zhejiang Geely Holding Group Company Limited.
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 $1.8 billion (U.S.), which will be paid in the form of a note in the amount of $200 million (U.S.), 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.

"Volvo is a great brand with an excellent product lineup. This agreement provides a solid foundation for Volvo to continue to build its business under Geely's ownership," said Alan Mulally, Ford's president and CEO. "At the same time, the sale of Volvo will allow us to further sharpen our focus on building 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."

Ford will continue to cooperate 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.

"The Volvo team has done an exceptional job of restructuring its business and remaining focused on delivering its plan during the sale process," said Lewis Booth, Ford's chief financial officer. "With Ford's continued investment in Volvo, it has launched its best-ever product range and remained true to its core values – safety, quality, environmental responsibility and modern Scandinavian design.

"We look forward to continuing to work with Volvo Cars, and wish the management team, employees and new owners every success for the future."

"Zhejiang Geely would like to pay tribute to Ford's stewardship of the Volvo brand, and we look forward to continued cooperation as Volvo embarks on the next stage of its evolution with Geely," said Li Shufu, chairman of Zhejiang Geely Holding Group Company Limited.

Stephen Odell, CEO of Volvo Cars, added, "The Volvo management team fully endorses Ford's sale of Volvo Cars to Geely. We believe this is the right outcome for the business, and will provide Volvo Cars with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future.

"Geely has been very supportive of Volvo Cars' business plans and management team. We look forward to building a strong relationship between Volvo Cars and Geely, and to maintaining a strong relationship with Ford in those areas where we will continue to work together to ensure a smooth transition."
 

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Chinese govt approves Geely's purchase of Volvo

Zhejiang Geely Holding Group Co is expected to complete it takeover of Swedish luxury car brand Volvo from US automaker Ford Motor Co on Monday after getting government approval for the deal.

Ministry of Commerce officials told China Daily on Thursday that the government cleared the Volvo deal on Monday 26, after the National Development and Reform Commission cleared the proposal last week.

Geely has also got the necessary anti-trust approvals from the European Union and the US government for the deal.

"With this the decks are now clear for Geely to complete its acquisition of Volvo and start manufacturing the brand in China," said Wang Zhile, director of the research center on transnational corporations under the Ministry of Commerce.

Yuan Xiaolin, Geely's spokesman for the Volvo deal was unavailable on Thursday for comment. However, unnamed sources from Geely told China Daily that the Zhejiang-based automaker will hold a formal function on Monday to complete the deal.

Geely's shares surged nearly 11.32 percent and closed at HK$2.95 per share in Hong Kong on Thursday.

Privately owned Geely paid $1.8 billion to acquire the Volvo car brand from Ford on March 28 this year. It was the biggest overseas deal made by Chinese automakers in recent times.

Geely Chairman Li Shufu had at that time indicated that the company would invest $900 million as operating capital in Volvo apart from the $1.8 billion purchase price.

Geely said on July 15 that it had appointed Li as the chairman of the board at Volvo Car Corp. At the same time it appointed the former president and CEO of Volvo Hans-Olov Olsson as the vice-chairman.

More appointments to the board and top management, including the chief executive and chief financial officer, may be made next week, said sources.

Analysts said the Volvo buy will help Geely gain a competitive edge in China and also a major toehold in Europe.

Pursuant to completion of the deal, Geely is likely to start making Volvo cars locally.

Though it has not announced a location yet, indications are that it may consider Jiading in Shanghai, Chengdu in Sichuan, Beijing or Tianjin as possible production sites.

During the firsts six months of the year, Volvo sold 15,497 cars in China, up 88 percent over last year.

That compares to the Swedish luxury brand's 5.2 percent and 9 percent year-on-year decline in major markets like the United States and Germany.

Geely plans to increase Volvo's annual sales in China to 150,000 units by 2015, said sources.

http://www.chinadaily.com.cn/china/2010-07/30/content_11070251.htm
 

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Ford officially sells Volvo to Geely for $1.8b

After months of protracted negotiations, Ford has officially sold Volvo to Zhejiang Geely Holding Group Company Limited – aka Geely – for $1.8 billion.

The Chinese automaker originally included a $200 million note and the balance in cash, and today, it paid the remaining $1.3 billion to wrap up the sale, although the final sale price won't be released until later this year and could put more cash in the pockets of FoMoCo.

Under the terms of the sale, Ford will continue to supply Volvo with everything from powertrains to stamping systems and other vehicle components for differing periods of time. Additionally, Ford and Geely have come to an agreement on intellectual property usage, with Volvo allowed to grant sub-licenses to specific systems to third parties, including Geely.

Stefan Jacoby – formerly of Volkswagen – will take the helm as the new President and Chief Executive of Volvo Cars, and under the new ownership, the automaker will continue to keep it headquarters and manufacturing centers in Sweden and Belgium.


PRESS RELEASE
FORD MOTOR COMPANY COMPLETES SALE OF VOLVO TO GEELY

DEARBORN, Mich., Aug. 2, 2010 – Ford Motor Company [NYSE: F] today announced it has completed the sale of Volvo Car Corporation and related assets to the Zhejiang Geely Holding Group Company Limited.


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, with the cash portion subject to customary purchase price adjustments at closing. Pursuant to the terms of the agreement, 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 final true-up of the purchase price adjustments later this year. The final true-up is expected to result in additional proceeds to Ford.

"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's 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."

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 offer. "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.

"Volvo is a proud company with a talented and dedicated team of employees," Odell said. "I am especially pleased that with Ford's continued investment in recent years, Volvo is well positioned for the future with an exciting range of products that remain true to its core values – safety, quality, environmental responsibility and modern Scandinavian design."


Geely Holding Group Completes Acquisition of Volvo Car Corporation

Stefan Jacoby Named President and Chief Executive of Volvo Cars; New Board Unveiled

HANGZHOU, China and GOTHENBURG, Sweden, Aug. 2 -- Zhejiang Geely Holding Group Co., Ltd. ("Geely Holding Group"), one of the fastest-growing car manufacturers in China, today announced it has completed the acquisition of 100 per cent of Volvo Car Corporation ("Volvo Cars") from Ford Motor Company.
Geely also announced that Stefan Jacoby, the Chief Executive of Volkswagen Group of America, would become President and Chief Executive Officer of Volvo Cars.

Li Shufu said: "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."

Stefan Jacoby, the new President and Chief Executive of Volvo Cars, said: "I am honoured to join a company with the prestige and growth potential of Volvo. Our employees, suppliers, dealers -- and above all our customers -- can be confident that Volvo will preserve its special status as the industry leader in vehicle safety and innovation -- even as it pursues new market opportunities."

Following completion of the transaction, Mr. Stefan Jacoby will join the board of Volvo Cars, chaired by Li Shufu, Chairman of Geely Holding Group. 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.

As announced on the signing of the stock purchase agreement on 28th March, 2010 Geely has agreed to pay USD 1.8 billion for Volvo Cars, which included a USD 200 million note with the balance paid in cash.

Geely issued the note and paid USD 1.3 billion in cash for Volvo Cars, utilising financing from Chinese institutions and its own balance sheet as well as international capital market resources. The closing consideration reflects adjustments in areas such as pension obligations and working capital.

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.

As part of the transaction, Volvo and Ford will maintain close component and supply relationships, ensuring continuity in areas where they provide supply to each other.

Completion of the 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 and Lewis Booth, Chief Financial Officer at Ford.

Mr. Li thanked Ford and the Volvo Cars management for their support during the transaction negotiations, and also paid tribute to union and government officials with whom Geely built close contacts.

"The signing and completion of this acquisition reflects the commitment of Ford and Volvo executives to the future of this company, along with the vital input of labour representatives and government officials in Sweden, Belgium and China as well as other relevant countries," said Mr. Li.

The Geely Chairman added that Mr. Stefan Jacoby will succeed Stephen Odell as Volvo Cars' President and Chief Executive, taking up his role on 16th August, 2010.

Hans-Oskarsson, deputy Chief Financial Officer, will become acting CFO of Volvo Cars, replacing Stuart Rowley. Mr. Odell and Mr Rowley are moving to leadership roles at Ford of Europe.

Along with the new management team at Volvo Cars, Geely today named the full board of directors for the Swedish carmaker, comprising:

Li Shufu (Chairman)
Hans-Olov Olsson (Vice-Chairman)
Freeman H. Shen
Hakan Samuelsson
Dr. Herbert Demel
Lone Fonss Schroder
Winnie Kin Wah Fok

The board -- which will include three labour representatives nominated by unions at Volvo Cars -- will assume its duties on completion of the transaction.
http://www.autoblog.com/2010/08/02/ford-officially-sells-volvo-to-geely-for-1-8b/
 

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Volvo's new factory to settle in Chengdu, Shanghai, Daqing

November 12, 2010
Geely chairman Li Shufu said on Nov. 10 that Volvo's new board has now decided to make China its "second home market” outside of Sweden and plans to build three plants in Chengdu, Shanghai and Daqing.

Li Shufu, chairman of Zhejiang Geely Holding Group, met Swedish King Carl XVI Gustaf along with Swedish scientists and businessmen in Zhejiang's capital Hangzhou, where Geely is based, and answered questions concerning Volvo's future and whether it will cause job losses in Sweden.

Li said in the past three months, the new Board of Directors held two meetings, and the Board and management decided to build China into Volvo's second home market. It announced the management team in China and plans to set up three plants in Chengdu, Shanghai and Daqing. Li said Volvo's layout in China "is well underway."

Li said that Volvo's strategy in the future is local development, local production and local sales.

"Europe's Volvos are to be produced in Europe. Volvos in the Chinese market are to be produced in China," he said.

The delegation of King Carl XVI Gustaf and the Royal Swedish Academy of Engineering Sciences was invited by the Chinese Academy of Engineering to visit China.

Chinese carmaker Geely Holdings Group Co. Ltd. and Ford Motor Co. signed the acquisition deal on March 28 and Geely took over Volvo this August after paying 1.5 billion U.S. dollars.

Geely's 100 percent ownership of Volvo provided the Chinese automaker with Volvo's nine vehicle models, three of its latest production platforms as well as production capacity of 600,000 units and more than 2,000 sales locations worldwide.

As soon as the agreement was completed, the Chinese group named Li Shufu, chairman of the board for Zhejiang Geely Holding Group, as the chairman of Volvo. Volvo's brand value is estimated at 2 billion U.S. dollars.

http://autonews.gasgoo.com/china-news/volvo-s-new-factory-to-settle-in-chengdu-shanghai-101112.shtml
 
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