At press conference in Gothenburg, Sweden today, Ford and Geely have announced that both companies have reached a final deal to sell Volvo to the Chinese automaker for the final purchase price of $1.8 billion. This transaction price includes Volvo’s physical assets and some of its intellectual property. Geely will own all equity stake in Volvo, with Ford holding none.
Volvo will be 100-percent owned by Geely, and Ford will not retain any equity stake. Because Volvo vehicles and Ford models share many parts, Ford has agreed to continue supplying powertrains, stampings and other systems to Volvo for an undisclosed transition period. Volvo will also be granted licenses to use some Ford-owned technology and will have the ability to sub-license some technology to third parties, including Geely.
The sale is expected to close in the third quarter of this year. More details can be found the press release below.
FORD REACHES AGREEMENT TO SELL VOLVO CARS AND RELATED ASSETS TO GEELY; SALE EXPECTED TO CLOSE IN THIRD QUARTER
DEARBORN, Mich., 28, 2010 – Ford Motor Company [NYSE: F] today announced it has entered into a definitive agreement to sell Volvo Car Corporation and related assets to Zhejiang Geely Holding Group Company Limited.
The sale is expected to close in the third quarter of 2010, and is subject to customary closing conditions, including receipt of applicable regulatory approvals.
The purchase price for Volvo Cars and related assets (primarily intellectual property) is $1.8 billion (U.S.), which will be paid in the form of a note in the amount of $200 million (U.S.), and the remainder in cash. The cash portion of the purchase price will be adjusted at close for customary purchase price adjustments relating to pension deficits, debt, cash and working capital, the net effect of which could be a significant decrease in the cash proceeds to Ford.
“Volvo is a great brand with an excellent product lineup. This agreement provides a solid foundation for Volvo to continue to build its business under Geely’s ownership,” said Alan Mulally, Ford’s president and CEO. “At the same time, the sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world.”
Ford will continue to cooperate with Volvo Cars in several areas after the sale has been completed in order to ensure a smooth transition, but will not retain any ownership in the Volvo Cars business.
Following completion of the sale, Ford will continue to supply Volvo Cars with, for differing periods, powertrains, stampings and other vehicle components.
As part of the sale, Ford also has committed to provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period to ensure a smooth separation process.
Ford and Geely have established agreements to govern the use of intellectual property; these agreements will allow both Volvo and Ford to deliver their business plans and provide appropriate safeguards against misuse. These agreements also will allow Volvo Cars to grant sublicenses to certain portions of Ford’s intellectual property used by Volvo Cars to third parties, including Geely.
“The Volvo team has done an exceptional job of restructuring its business and remaining focused on delivering its plan during the sale process,” said Lewis Booth, Ford’s chief financial officer. “With Ford’s continued investment in Volvo, it has launched its best-ever product range and remained true to its core values – safety, quality, environmental responsibility and modern Scandinavian design.
“We look forward to continuing to work with Volvo Cars, and wish the management team, employees and new owners every success for the future.”
“Zhejiang Geely would like to pay tribute to Ford’s stewardship of the Volvo brand, and we look forward to continued cooperation as Volvo embarks on the next stage of its evolution with Geely,” said Li Shufu, chairman of Zhejiang Geely Holding Group Company Limited.
Stephen Odell, CEO of Volvo Cars, added, “The Volvo management team fully endorses Ford’s sale of Volvo Cars to Geely. We believe this is the right outcome for the business, and will provide Volvo Cars with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future.
“Geely has been very supportive of Volvo Cars’ business plans and management team. We look forward to building a strong relationship between Volvo Cars and Geely, and to maintaining a strong relationship with Ford in those areas where we will continue to work together to ensure a smooth transition.”
African Company Mobius Makes World’s Cheapest SUV [Video]
Conjure up an image of the world’s cheapest SUV and Mobius Motors will likely be the last company on your mind, but this is a company on a mission. Based in Nairobi, Kenya, it has spent most of its existence trying to put Africa on wheels.
The Mobius Two is the company’s second attempt at an ultra-affordable SUV. To keep weight down, its body is built from aluminum and carbon fiber. To make repairs easy, its simple construction consists of a tubular steel platform that can be welded back together when broken. The engine, likely to be a Toyota-sourced four-cylinder gasoline engine, is said to be familiar to local mechanics and light on gas.
With an expected price-tag of $6,000, this SUV is bare bone and strictly about getting from point A to point B. You’d be barking up the wrong tree if you like your ride to be stylish and to have air conditioning or glass side windows. Instead, what you get is a very roomy vehicle that can seat up to six to eight adults, depending on the configuration, and haul up to 1,100 pounds.
Affordable, durable and versatile — this SUV looks to be just right for the rural parts of Africa and even the cities.
Mazda and Fiat Team-up to Develop New Roadster
We here at FbaPPs have argued that the Fiat / Chrysler alliance is in need of a third partner to ensure its long-term viability, and have speculated that Mazda could be that likely candidate. With the announcement that Fiat and the Japanese automaker will teamed-up to work on an all-new roadster, we think this might be the beginning of a long-term relationship.
The non-binding Memorandum of Understanding between the two automakers calls for the development of a new rear-wheel-drive roadster based on the next-generation MX-5 (Miata) for Fiat’s Alfa Romeo brand and for Mazda. The two models will be distinctly differentiated by brand-specific design-themes, as well as their own proprietary engines. Despite their differences, both will be manufactured at Mazda’s Hiroshima, Japan, plant.
“This agreement clearly demonstrates our commitment to Alfa Romeo and the determination to grow it into a truly global brand. By partnering with Mazda, we will be co-operating with the recognized leader in compact rear-drive vehicle architectures in order to deliver an exciting and stylish roadster in the Alfa Romeo tradition. We are appreciative of this collaboration with Mazda and look forward to maintaining a fruitful and continuous relationship.” said Fiat CEO Sergio Marchionne.
According to reports, the Alfa Romeo version, which is expected to go on sale in 2015, will revive the classic Alfa Romeo Spider. A design study of the Spider is pictured above.
All-new 2013 Hyundai Santa Fe Pictures Revealed
Hyundai has released two computer-generated pictures of the all-new 2013 Hyundai Santa Fe crossover ahead of its official debut at the 2012 New York Auto Show. Judging from the pictures, the new Santa Fe looks to adopt the Korean automaker’s Fluidic Sculpture design theme, although things have been toned-down relative to what we see on cars such as the Hyundai Tuscon, Sonata and Elantra.
As a matter of fact, Hyundai calls the new design “Storm Edge,” saying it’s an evolution of the “Fluidic Sculpture” theme. A sporty, more aggressive look suggests that the Santa Fe will go upscale to better compete with the likes of the Ford Edge, Nissan Murano and Jeep Grand Cherokee.
There is little indication that the new Santa Fe will feature a two-row or three-row setup, but with the New York Auto Show just one month away, we won’t have to wait long to find out.