Chinese automotive company Zhejiang Geely has completed its acquisition of Volvo Car Corporation.
The Chinese Geely Holding Group has taken 100 per cent ownership of Swedish manufacturer Volvo Cars from Ford Motor Company. Under the new ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium; and its management will have the autonomy to execute its business plan under the strategic direction of the board. Completion of the acquisition, which follows more than a year of talks between Geely and Ford, was marked at a signing ceremony in London attended by Li Shufu and Lewis Booth, Chief Financial Officer at Ford.
Geely Chairman Li Shufu said: “This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars. This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets.”
Geely also announced that Stefan Jacoby, the Chief Executive of Volkswagen Group of America, would become President and Chief Executive Officer of Volvo Cars. Jacoby succeeds Stephen Odell as President and Chief Executive, taking up his role on 16th August, 2010
Jacoby said: “I am honoured to join a company with the prestige and growth potential of Volvo. 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.”
As announced on the signing of the stock purchase agreement on 28th March, 2010 Geely has agreed to pay US $1,8 billion for Volvo Cars, which included a US$ 200 million note with the balance paid in cash. Geely issued the note and paid US $1,3 billion in cash for Volvo Cars, utilising financing from Chinese institutions and its own balance sheet as well as international capital market resources. The closing consideration reflects adjustments in areas such as pension obligations and working capital.
For Volvo Cars South Africa it will be business as usual. Volvo Cars SA reassures that Volvo owners and potential owners will not be affected by the sale.