Ford Motor said Monday it completed the sale of its Swedish Volvo Car unit and related assets to China's Zhejiang Geely Holding Group Co.
Geely at the same time announced that Volkswagen's former U.S. chief Stefan Jacoby will become chief executive of Volvo Car and become a member of the board effective Aug. 16. As previously announced, Stephen Odell, the present CEO of Volvo Car, is returning to Ford as CEO of Ford Europe.
"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," Jacoby said.
The total purchase price was $1.8 billion, including a $200 million note and the balance in cash. "Pursuant to the terms of the agreement, Geely today issued the note and paid $1.3 billion in cash to complete the sale," Ford said in a statement.
Ford said it will continue to cooperate with Volvo in several areas, but has not retained any ownership. The company will continue to supply vehicle components and engineering support and other services for a transition period.
"Volvo is an excellent brand with a strong product line, and it has returned to profits after a successful restructuring. We are confident Volvo has a solid future under Geely's ownership," said Ford Chief Executive Alan Mulally.
Volvo will retain its headquarter in Sweden and manufacturing in Sweden and Belgium. "Its management will have the autonomy to execute on its business plan under the strategic direction of the board," Geely said.
Stefan Lofven, head of Sweden's IF Metall workers union, welcomed the deal. "Volvo will have a management and governance of large industrial and international expertise," he said. "With production, research and development and headquarters remaining in Sweden, while China is the biggest growth market for the automotive industry, we hope for positive employment effects." Lofven will travel to China in the autumn to meet representatives of the new owners.
Earlier this year, General Motors sold Swedish carmaker Saab to Dutch sports-car maker Spyker Cars for $74 million in cash and $326 million in preferred shares.