Official: Geely Completes Volvo Acquisition, Names Stefan Jacoby CEO
Last October, Ford confirmed Chinese carmaker Geely as its preferred bidder for Volvo. After almost ten months of negotiations, Geely has officially acquired Volvo from Ford and named former Volkswagen of America CEO Stefan Jacoby the head of Volvo.
"This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars," said Li Shufu, chairman of Volvo and Geely. "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."
On March 28, this year, Geely and Ford signed a sales agreement that called for a $1.8 billion transaction price, but was dependent on Volvo's finances including working capital and pension obligations. With the new adjustments, the closing transaction price came to a total of $1.5 billion. Geely paid Ford $1.3 billion in cash and the remainder came from a $200 million credit note. Ford paid $6.45 billion for Volvo in 1999.
Although Ford took a significant loss in selling Volvo, Ford CEO Alan Mulally views the sale as positive for both Ford and Volvo. With the sale, Volvo will receive more attention from its new Chinese owners and Ford will be able to focus more closely on its two core brands now. Despite the sale, Ford and Volvo have said they will continue to cooperate in certain areas including powertrain and body stamping. As of now, Ford has sold off its interests in Aston Martin, Jaguar Land Rover, and Volvo, decreased its stake in Mazda, and announced that Mercury production ceases in October.
In addition to getting new owners, Volvo is getting new leadership. Geely lured Stefan Jacoby away from his post as CEO of Volkswagen of America and appointed him the new CEO of Volvo. Stephen Odell, former CEO of Volvo, is remaining with the Ford family and is becoming group vice president, chairman, and CEO of Ford of Europe.
"I am honored to join a company with the prestige and growth potential of Volvo," said Jacoby. "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."
Do you have the same faith in Geely that Stefan Jacoby does? Will a Chinese-owned Volvo prosper or will it struggle to grow? Let us know what you think in the comments below.
Source: Ford, Volvo