Ford will sell Volvo for $1.8 billion. Ford will receive $1.6 billion in cash and a $200 million note from Geely under the deal.
Michael Robinet, vice president of global vehicle forecasting for CSM said that even now the deal is signed, it is likely that Ford, Volvo and Geely will continue to work together for several years.
Ford and Volvo cars share common parts, assembly processes and technology, Robinet said. “Selling an integrated car division … is like selling a room on your house. It is very connected and not easily separated.”
Ford first said it would consider selling Volvo in December 2008 and named Zhejiang Geely Holding Group as its preferred bidder last fall. In November, Ford reached a deal with Geely on the terms of Volvo’s intellectual property.
Freep.com said Ford has lost millions on Volvo since acquiring the Swedish automaker and reported a pre-tax loss of $653 million in 2009.