Geely closes deal to buy Volvo from Ford

Geely closes deal to buy Volvo from Ford

At a press conference held in Gothenburg, Sweden yesterday, Ford executive vice president Lewis Booth and Geely chairman Li Shufu announced that the the Chinese automaker will buy Volvo. The final purchase price is $1.8 billion USD, which includes some of Volvo’s intellectual property and its other physical assets.

The deal means Volvo will be 100-percent owned by Geely, and Ford will not keep any equity stake. Because of the component sharing between existing Volvo vehicles and Ford models, Ford will continue supplying powertrains, stampings and other systems to Volvo for a transitional period.

What makes this deal so tricky is the intellectual property situation. Volvo will be granted special licenses to use some Ford-owned technology and will also be able to sub-license some technology to third parties, including Geely.

Li committed to keeping the Volvo brand separate from Geely while expanding its global reach, particularly in China. Li also stated that Volvo wouldn’t close its factories in Sweden.

The sale is expected to conclude in the third quarter of this year. Unlike the recently aborted sale of Hummer, the Chinese government will most likely approve this deal since Geely is already one of China’s strongest carmakers.

At a press conference held in Gothenburg, Sweden yesterday, Ford executive vice president Lewis Booth and Geely chairman Li Shufu announced that the the Chinese automaker will buy Volvo. The final purchase price is $1.8 billion USD, which includes some of Volvo’s intellectual property and its other physical assets.

The deal means Volvo will be 100-percent owned by Geely, and Ford will not keep any equity stake. Because of the component sharing between existing Volvo vehicles and Ford models, Ford will continue supplying powertrains, stampings and other systems to Volvo for a transitional period.

What makes this deal so tricky is the intellectual property situation. Volvo will be granted special licenses to use some Ford-owned technology and will also be able to sub-license some technology to third parties, including Geely.

Li committed to keeping the Volvo brand separate from Geely while expanding its global reach, particularly in China. Li also stated that Volvo wouldn’t close its factories in Sweden.

The sale is expected to conclude in the third quarter of this year. Unlike the recently aborted sale of Hummer, the Chinese government will most likely approve this deal since Geely is already one of China’s strongest carmakers.

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