The Zhejiang Geely Holding Group of China signed a binding deal to purchase the ailing Volvo Cars from leading manufacturer Ford Motor Co for $1.8 billion.
“I can confirm that a final agreement on the sale of Volvo to Geely was signed at 2:40 pm,” Volvo Cars’ spokesperson Per-Ake Froberg said last March 28, 2010.
A news conference was then organized at Volvo’s headquarters in Goteborg, which is located on the west coast of Sweden. During the conference, representatives of both companies stated that regulatory approvals have to be completed before the deal is totally sealed.
The transaction, which is expected to be finished by the third quarter of the year, is going to be paid through cash and a $200 million note.
Ford has been planning to sell its problematic Volvo component ever since 2008, so that it can more effectively manage its other car brands, namely Mercury, Lincoln and Ford.
However, the transaction will bring only a third of the $6.4 billion Ford paid in order to buy the Swedish luxury car brand in 1999.
At present, there are over 22,000 people working for Volvo across the world, and more than half of them are located in Sweden. Some unions within the company were against the deal at first because of possible job layoffs and ambiguous expansion plans.