Ford Motor Co. (F) has received a third bid for its Volvo unit from a Swedish consortium, Konsortium Jakob AB. The consortium has been formed on an initiative from the engineers’ trade union at Volvo cars. The consortium has posed a challenge to Chinese carmaker Zhejiang Geely Holding Group, the foremost bidder for Volvo, by submitting a cash bid to Ford.
Last week, Ford has received another bid from Crown consortium, a group led by former Ford executives, for its Volvo unit. This consortium is led by Ford’s former director, Michael Dingman, and former executive of both Ford and Chrysler, Shamel Rushwin.
In 1999, Ford had acquired the Volvo Car Corporation from Sweden-based Volvo Group for $6.45 billion. However, the company put up the unit for sale in December last year in an effort to cut costs and raise cash amidst plunging industry-wide auto sales. The company is struggling to sell the loss-making unit by the end of the year.
Ford had discussions with many automakers for the sale, including Renault SA, China’s third-largest automaker, Dongfeng Motor Group and fifth-largest automaker Beijing Automotive Industry Holding Corp (BAIC). So far, Geely Automotive has submitted the only concrete bid for the unit. Media reports have disclosed that Geely valued the unit at close to $2 billion.
In the first half of 2008, Ford sold its U.K.-based Jaguar and Land Rover brands to the Indian auto giant Tata Motors (TTM). The company sold the unit for $2.3 billion, about half the price it had purchased from BMW in 2000.
In the latter half of 2008, Ford shrugged off its 20% stake in the Japanese automaker, Mazda Motors, for $540.3 million. The company reduced its stake to 13.4% in Mazda, which it had rescued from bankruptcy in 1979.
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