STOCKHOLM–Ford Motor Co. said Wednesday it is close to selling its loss-making Volvo unit to China's Geely and expects a final deal in the first quarter of 2010.
Ford said in a statement that "all substantive commercial terms relating to the potential sale of Volvo Car Corporation have been settled." Ford chose Geely as the preferred bidder for Volvo in October.
Work on financing and government approvals remains to be completed, Ford said, adding it expects the deal to close "in the second quarter 2010, subject to appropriate regulatory approvals.'' The announcement did not reveal the amount of Geely's offer.
Ford, which acquired Volvo in 1999 for $6.45 billion, has wanted to unload Volvo since last year to raise cash and focus its efforts on three core brands: Ford, Lincoln and Mercury.
For 10 years the brands have shared safety and other technology. For instance, Ford's Taurus sedan, the Taurus, is based on Volvo underpinnings. Any agreement is expected to include details about sharing intellectual property rights and engineering.
"The prospective sale would ensure 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 its core ONE Ford strategy,'' the statement said.
It said Ford expects to cooperate with Volvo Cars after the sale but doesn't intend to maintain a shareholding in Volvo.
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