China’s Geely buys Volvo

volvoThe Chinese car manufacturer Zhejiang Geely Holding has signed a deal to purchase the iconic Swedish Volvo brand from US car-maker Ford.

Volvo Cars spokesman Per-Ake Froberg said in a news conference this week, “I can confirm that a final agreement on the sale of Volvo to Geely was signed at 2.40pm”.

The new deal was signed at the Gothenburg headquarters of Volvo, where Geely’s President Li Shufu and Ford’s director of finance Lewis Booth were both in attendance. Mr Booth reported that the sale was made for USD 1.8 billion, considerably less than the 1999 price of USD 6.4 billion paid by Ford.

Last December, the Ford Motor Company announced that it had reached an agreement over the main sales conditions for the loss-making Swedish subsidiary to Geely, which is one of the largest private auto manufacturers in China. The finalisation of the deal ends a decade-long relationship between Ford and the family-friendly Swedish brand, Volvo.. Ford has stated that “a definitive sale agreement will be signed in the first quarter of 2010, subject to appropriate regulatory approvals”.

Geely, a relative industry newcomer, was believed to have secured the finances for the takeover earlier this month. The group has said that nothing will change in terms of operation and that both Geely and Volvo will operate as independent brands.