Ford to sell Volvo to a Chinese company
Published On Mar 30, 2010 06:36 AM By Vikas
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Ford, US based leading car maker, announced on Monday that it has decided to sell its subsidiary Volvo Car Corporation to a China based company named as Zhejiang Geely Holding Group Company Limited. Both of the companys have come into a definitive agreement according to which the purchase price of the Volvo Cars and related assets is around $1.8 billion (U.S.). The money will be paid through a note in the amount of $200 million (U.S.), and the remainder will be paid in the cash.
These definitive transaction agreements includes in addition to the stock purchase agreement, further agreements on intellectual property rights, supply and R&D arrangements between Volvo Cars, Zhejiang Geely Holding Group and Ford Motor Company.
In its press release the Zhejiang Geely Holding Group says that to complete the transaction it has secured all necessary financing. With this, Zhejiang Geely Holding Group has secured significant working capital facilities to fund Volvo Cars’ ongoing business. The company intends to continue existing manufacturing facilities of Volvo cars, in Sweden and Belgium. It is also looking to built new production facilities for Volvo Cars in China for the local market.
However, after the completion of the selling process, Ford Motors will continue with supplying power-trains, stampings and other vehicle components to Volvo Cars. Besides this the company has committed to provide some technical to Volvo Cars including engineering support, information technology, access to tooling for common components, and other selected services for a transition period to ensure a smooth separation processes.
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