Summary
Ford Motor Company announced on March 28, 2010, the signing of a Stock Purchase Agreement to sell its Volvo Car Corporation (VCC) and its subsidiaries, including Volvo Cars of North America, LLC (VCNA), to Zhejiang Geely Holding Group Company Limited (Geely) for a total purchase price of $1.8 billion. The transaction includes the sale of 100% of VCC and VCNA, with Volvo retaining its intellectual property and Ford licensing certain IP to Volvo. The purchase price consists of cash and a $200 million seller loan note, with potential adjustments to the cash portion based on Volvo's financial condition at closing. This divestiture marks a significant strategic move for Ford, allowing it to focus on its core brands and improve its financial flexibility.
Key Highlights
- 1Ford is selling its Volvo Car Corporation (VCC) and its subsidiaries to Geely for $1.8 billion.
- 2The purchase price includes $200 million in seller loan notes, with the remainder in cash, subject to adjustments.
- 3The transaction is expected to close in the third quarter of 2010, pending regulatory approvals.
- 4Ford will retain certain intellectual property rights and license others to Volvo, while Volvo will also license IP back to Ford.
- 5Ford will continue to supply Volvo with components and provide transition services for a period.
- 6A portion of the cash proceeds will be used to partially prepay outstanding term loans under Ford's credit agreement.