Ford Confirms China's Geely As Volvo Preferred Bidder

[leanderj]

http://online.wsj.com/article/BT-CO-20091028-706303.html

Ford Motor Co. (F) confirmed it has selected a group led by China's Zhejiang Geely Group Holdings Co. as the preferred bidder for its luxury Volvo brand.

The Wall Street Journal, citing a senior Geely executive, reported shortly before Ford's statement that the group had been tapped for Volvo, which Ford officially put on the block in December. The Journal reported a month ago that Ford was in the midst of analyzing a bid by Geely to acquire Volvo for about $2.5 billion.

Ford and the Geely group will enter "more detailed and focused negotiations," but the auto maker noted that "no final decision has been made."

Chief Financial Officer Lewis Booth said, "Any prospective sale would have to ensure that Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement our core ONE Ford strategy." ...

Last year, the company sold its Land Rover and Jaguar brands to Tata Motors.

[AndyA]

1. Volvo has always been a pretty well built car.

That will probably be history once the Chinese get their hands on it.

[pampango]

2. Here's a Bloomberg story on this.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajPMKE2VfFV8

"Geely, China’s largest private automaker, is prepared to pay about $2 billion for Volvo, less than a third of what Ford paid a decade ago, people familiar with the talks have said."

"Ford put Volvo on the block in December. It sold the Jaguar and Land Rover brands in the U.K. to India’s Tata Motors Ltd. last year for $2.4 billion. Geely first approached Ford about buying Volvo in the summer of 2008, people familiar with the matter had said, and the Chinese company emerged as the frontrunner. Ford also talked to Beijing Automotive Industry Holding Co. and the Crown Group, led by former Ford director Michael Dingman, son James Dingman and Shamel Rushwin, a former manufacturing and labor executive at the automaker, the people had said.

Ford had considered keeping the Swedish unit, whose losses are narrowing and sales are improving, people familiar with the situation had said. With Volvo’s prospects improving, Ford thought it may get a better bid for the luxury line when the economy improves, the people said.

Any buyer would gain insight into Ford’s future products, which will still share Volvo technology and mechanical vehicle designs, the people said. Ford will continue to provide engines and other major components to Volvo after it’s sold, which is why the intellectual property issues need to be resolved."

[madrchsod]

3. the chinese want the technology that volvo engineers developed

it`s easier and cheaper for china to buy technology than to develop their own. at least they are paying for technology instead of stealing it.