China's Geely to buy Ford's Volvo

Zhejiang Geely Holding Co. united to buy Volvo Cars from author Motor Co. for US$1.8 billion in the biggest overseas acquisition by a Asiatic automaker, more than 18 months after the two companies first entered discussions.

The price includes a $200 million note and the remainder to be paid in cash, author Chief Financial Officer Lewis histrion said yesterday in Gothenburg, Sweden. Time spent on seeking regulatory approval in different jurisdictions means the companies today aim to rank the deal in the ordinal quarter, Geely Chairman Li Shufu said.

Booming income made China the world's largest car market in 2009, generating profit that's allowing automakers to accomplish out to Western markets and technologies. Divesting Volvo completes author Chief Executive Officer Alan Mulally's strategy of exiting European luxury lines to focus on his company's namesake sort after the 2007 understanding of Aston Martin, and of Jaguar and Land Rover to Tata Motors Ltd. for $2.4 billion the mass year.

"If I were a competitor to Geely in China and all of a sudden I would retrograde ground to my competitor because they acquired Volvo, I would look to do the same," Mike Tyndall, an moving specialist with Nomura Securities in London, said in a telephone interview. "The experience of both Tata and Geely module be the real test."

Geely Automobile Holdings Ltd., the automaker's listed unit, gained 1.5 proportionality to HK$4.16 in Hong Kong trading. author chromatic 12 cents to $13.98 at 8:04 a.m. before regular New royalty Stock Exchange composite trading, extending a inflate of 39 proportionality this assemblage finished March 26.

Yesterday's agreement includes cost regarding intellectual property rights and supply as well as research and development, Geely said. The Asiatic company module help Volvo, whose headquarters module stay in Gothenburg, tap China's growing market, Li said at a joint advise conference with Ford.

Tata, India's biggest truckmaker, reported its first profit in the lodge ended in December after paying off the remaining debt from the Jaguar and Land Rover acquisition in Oct by raising $750 million. Tata plans to hit seven Jaguar and Land Rover dealerships in India this fiscal year, including ones currently operating in Mumbai and New Delhi.

As part of its efforts to increase the Amerindic company's income abroad, Tata last month hired Carl-Peter Forster, a past General Motors Co. and Bayerische Motoren Werke AG executive, as chief executive, supported in the company's Mumbai headquarters. Forster module be responsible for reviving the slumping luxury brands that Tata bought from author patch crescendo income of the $2,500 Nano, the cheapest car in the world. Tata's hit has risen 13.8 proportionality since the Jaguar and Land Rover deal was announced in March 2008.

"I see Volvo as a tiger: it belongs to the forest and shouldn't be contained in the zoo," Li said in Mandarin. "The heart of the tiger is in Sweden and Belgium," he said, referring to the two countries where Volvo has its main plants. "Its paws should extend all across the world."

Volvo plans to produce 390,000 cars this year, compared with 330,000 in 2009, CEO Stephen Odell said. Geely module restore profitability to Volvo, according to Ford's Booth.

Ford module continue to supply Volvo powertrains, stampings and some vehicle components. It also united to wage engineering and profession support, and access to tooling for common components for an some period.

The Nordic carmaker's S40 model is built on the mechanical foundation of the author Focus today sold in Europe. Volvo supplies diesel engines for Ford's European lineup.

"We hit continuing to equip in Volvo, just as we did at Jaguar Land Rover, to make sure that our employees and today our ex-employees at Jaguar Land Rover are going to be working in a place that has good potential for the future," histrion said in a March 24 interview.

In February, Jaguar Land Rover reported its first quarterly profit since being bought by Tata Motors after shedding staff and boosting income of luxury cars.

Geely first approached Dearborn, Michigan-based author about buying Volvo in mid-2008, two people familiar with the talks hit said. author named Geely its "preferred bidder" in Oct and said on Dec. 23 that they had united on the major cost of the transaction.

The cash assets of the purchase price module be keyed for Volvo's pension deficits, debt, cash and working capital, which could mean a "significant decrease" in proceeds to Ford, the U.S. carmaker said.