Chinese car maker Geely Holding Group (吉利控股集團) said yesterday it had formally completed a deal to buy Sweden’s Volvo Cars from US auto giant Ford at a ceremony in London.
The Swedish brand will keep its headquarters and plants in Sweden and Belgium, and its management will retain its autonomy under a board headed by Geely Group chairman Li Shufu (李書福), the Chinese company said in a statement.
“This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars,” Li said in the statement. “This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design.”
Li earlier told Xinhua news agency that he hoped to see the struggling Swedish brand regain its former strong reputation.
“After the takeover, Geely remains Geely and Volvo is still Volvo. The relationship between the two companies is brotherhood and not a parent-and-child relationship,” Li was quoted as saying.
Geely, which first agreed to take over Volvo in March, said in the statement it paid a total of US$1.5 billion to Ford for Volvo, US$1.3 billion in cash and an issued note of US$200 million.
The final price was lower than the US$1.8 billion price tag announced on March 28, and Geely said it reflected “adjustments in areas such as pension obligations and working capital.”
Geely also said it would invest US$900 million to improve the brand.
Both the EU’s competition watchdog and China’s commerce ministry gave their approval for the takeover last month.
Geely said Stefan Jacoby, who is currently the head of Volkswagen in the US, would become Volvo’s new president and chief executive.
“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,” he said.
Founded in 1927, Volvo was sold to Ford in 1999 for US$6.4 billion.
Its decade under the US auto giant was plagued by dwindling sales. It sold 334,800 cars in last year, but sales have been picking up this year.
Geely has said it plans to expand the presence of Volvo — known for its sturdy, family-friendly vehicles — in China, now the world’s largest car market.
It also plans to target the European and North American markets.
Swedish union IF Metall said it welcomed that Volvo’s headquarters would stay in Sweden and hoped the carmaker’s entry into the Chinese market would have a positive effect for employment.
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