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Sale of Volvo to Geely goes through

Volvo is now 100% owned by Chinese carmaker Geely after the sale by Ford was completed at a ceremony in London today.

Geely (the Zhejiang Geely Holding Group Co., Ltd) used the signing to announce that Stefan Jacoby, the chief executive of Volkswagen Group of America, would become president and chief executive officer of Volvo Cars.

The carmaker said it will ensure Volvo remains true to its core values.

Geely chairman Li Shufu said: "This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars. This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets."

Stefan Jacoby added: "I am honoured to join a company with the prestige and growth potential of Volvo. Our employees, suppliers, dealers - and above all our customers - can be confident that Volvo will preserve its special status as the industry leader in vehicle safety and innovation - even as it pursues new market opportunities."

Following completion of the transaction, Stefan Jacoby will join the board of Volvo Cars, chaired by Li Shufu.

The board will comprise several new directors including Hans-Olov Olsson, a former president and chief executive of Volvo Cars and a former chief marketing officer of Ford, who will become vice-chairman of the board.

Geely paid USD 1.8 billion for Volvo Cars, which included a USD 200 million note with the balance paid in cash.

Geely issued the note and paid USD 1.3 billion in cash for Volvo Cars, utilising financing from Chinese institutions and its own balance sheet as well as international capital market resources. The closing consideration reflects adjustments in areas such as pension obligations and working capital.

Under the new ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium; and its management will have the autonomy to execute on its business plan under the strategic direction of the board.

As part of the transaction, Volvo and Ford will maintain close component and supply relationships, ensuring continuity in areas where they provide supply to each other.

Completion of the acquisition, which follows more than a year of talks between Geely and Ford, was marked at a signing ceremony in London attended by Li Shufu and Lewis Booth, chief financial officer at Ford.

Li thanked Ford and the Volvo Cars management for their support during the transaction negotiations, and also paid tribute to union and government officials with whom Geely built close contacts.

"The signing and completion of this acquisition reflects the commitment of Ford and Volvo executives to the future of this company, along with the vital input of labour representatives and government officials in Sweden, Belgium and China as well as other relevant countries," said Li.

The Geely chairman added that Stefan Jacoby will succeed Stephen Odell as Volvo Cars' president and chief executive, taking up his role on 16th August, 2010.

Hans Oscarsson, deputy chief financial officer, will become acting CFO of Volvo Cars, replacing Stuart Rowley. Odell and Rowley are moving to leadership roles at Ford of Europe.

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