Ford Motor Co, the second-biggest US automaker, said it isn't in talks to sell its profitable Volvo Car Corp business, after reports in the UK and the US said the company may dispose of the Swedish unit.
"Ford is not in any discussions with anyone in relation to selling Volvo," Ford spokesman John Gardiner said in a telephone interview from London yesterday.
The London-based Sunday Times reported yesterday that Ford had decided two weeks ago to sell Volvo for as much as US$8 billion. The Sunday Telegraph, for its part, said Ford was willing to listen to offers from potential buyers of the automaker and would make a final decision on whether to proceed after completing the sale of its Land Rover and Jaguar businesses.
Ford said last month it was conferring with investment bankers about options for Jaguar and Land Rover.
The Dearborn, Michigan-based company is trying to restore profit after a record US$12.6 billion loss last year. The Sunday Times reported on July 8 that Ford set a deadline for Thursday for bids to buy Jaguar and Land Rover.
"We've had contact from third parties" about Jaguar and Land Rover, Gardiner said yesterday. "We continue to aggressively evaluate that level of interest."
He declined to comment further on yesterday's reports in UK newspapers or to say whether there was a deadline for expressions of interest in Jaguar and Land Rover.
Aston Martin
Ford bought the Swedish carmaker from Volvo AB in 1999 for US$6.45 billion, forming part of its Premier Automotive Group of luxury-brand cars, with Jaguar, Land Rover and Aston Martin. Ford agreed to sell Aston Martin in March to a group of investors led by UK auto-racing champion David Richards for US$848 million. The sale was completed in May.
Separately, the New York Times reported on its Web site yesterday that Ford had decided to entertain bids for Volvo following a board meeting last week. The newspaper said it received the information from people it did not name who were knowledgeable of the situation.
Last month, two people familiar with Ford's strategy said that the company is seeking buyers for Volvo as well as the Jaguar and Land Rover brands.
Record Sales
Volvo's sales this year will exceed the 2004 record of 456,000 cars and sport-utility vehicles, helped by new models and increased demand in Russia, Fredrik Arp, the division's chief executive officer, said in an interview on June 26. Volvo introduced the new S80 sedan and C30 compact car last September. It is focusing on expansion in Russia, China and India to match growth at competitors such as Volkswagen AG's Audi luxury division and Bayerische Motoren Werke AG.
BMW, the world's largest maker of luxury cars, could be interested in bidding for Volvo, the Sunday Times reported. Renault SA, Hyundai Motor Co or a Chinese manufacturer could also compete, the newspaper reported.
"A tie-up between Volvo Cars and BMW makes sense, even if not the perfect fit," analysts at Fortis Bank, including Bertrand Rocher, said in a note dated July 10. "The acquisition of Ford's Volvo Cars could even provide BMW with a good opportunity to leverage on its current know-how."
Private Equity
Private-equity companies could also be attracted to Volvo, the Sunday Times said.
Buyout businesses have recently agreed to deals involving automobile suppliers and manufacturers.
DaimlerChrysler AG, the world's second-largest maker of luxury cars, announced in May that it will sell 80.1 percent of its unprofitable Chrysler unit to Cerberus Capital Management LP, the New York-based private-equity company.
Cerberus also agreed to buy Tower Automotive Inc, the world's largest maker of automotive frames, for about US$1 billion in March.
Dana Corp, another bankrupt auto-parts maker, arranged a US$500 million investment from private-equity firm Centerbridge Capital Partners LP to create two trust funds that will help pay health-care expenses for retirees.
Ford's North American automotive operations were the primary source of last year's record loss for the company. The unit was hurt by declining sales of pickup trucks and sport-utility vehicles, Ford's main source of profit.
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