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Ford said to be near sale of Volvo to China's Geely

Zhejiang Geely Holding Group Co. is offering about $2 billion, or about one-third what Ford paid for the unprofitable Swedish unit a decade ago.

December 23, 2009|Bloomberg News

Ford Motor Co., seeking to unload its unprofitable Volvo unit, will announce todaythat talks with Zhejiang Geely Holding Group Co. have progressed to the point where a sale is likely, according to a person familiar with the matter.

Ford, which named China's Geely its "preferred bidder" for Volvo on Oct. 28, also will lay out an estimated timeline for completing the sale, said the person, who asked not to be identified because the details aren't yet public.

John Gardiner, a Ford of Europe spokesman, didn't immediately respond to a request for comment.

Volvo was put on the block a year ago as Ford finishes shedding overseas luxury brands to focus on its namesake division.

Geely is offering about $2 billion, less than one-third what Dearborn, Mich.-based Ford paid for the Swedish unit a decade ago, according to people familiar with the bid.

Geely, China's second-largest private automaker, hopes to gain insights into Western vehicle development and manufacturing through Volvo, people familiar with the negotiations have said.

"Ford has integrated Volvo into their platforms and a lot of technology, like safety technology," said John Wolkonowicz, an analyst at IHS Global Insight of Lexington, Mass. "Why prop up China with your technology when you know they're going to become a major competitor someday?"

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