Today, Ford Motor (F) will reveal its progress on the sale of Swedish brand, Volvo. The automaker is most likely to sell the unit to China-based Zhejiang Geely Holding Group. Ford aims to conclude the sale in early 2010.
Ford had discussions with many automakers to sell Volvo, including Renault SA, China’s third-largest automaker, Dongfeng Motor Group and fifth-largest automaker Beijing Automotive Industry Holding Corp. In October, Ford revealed that the preferred bidder is Geely, who has submitted a concrete bid for the unit. Media reports had disclosed that Geely valued the unit at close to $2 billion.
Geely’s bid is backed by the Beijing Government. Three major Chinese banks, including Bank of China, China Construction Bank and Export-Import Bank of China have agreed to extend loans to the Chinese automaker for the deal.
In 1999, Ford had acquired Volvo Car Corporation from Sweden-based Volvo Group for $6.45 billion. However, the company had 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.
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 at which it was purchased from BMW in 2000.
In the latter half of 2008, Ford shrugged off its 20% stake in the Japanese automaker, Mazda Motor, for $540.3 million. The company reduced its stake in Mazda to 13.4%, which it had rescued from bankruptcy in 1979.
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