Chinese car manufacturers Geely completed the acquisition of Volvo from Ford earlier this week for $1.8 billion.
Geely also announced that Stefan Jacoby, the Chief Executive of Volkswagen Group of America, would become President and Chief Executive Officer of Volvo Cars.
Following completion of the transaction, Mr Stefan Jacoby will join the board of Volvo Cars, chaired by Li Shufu, Chairman of Geely Holding Group. The board will comprise several new directors including Hans-Olov Olsson, a former President and Chief Executive of Volvo Cars and a former Chief Marketing Officer of Ford, who will become Vice-Chairman of the board.
As announced on the signing of the stock purchase agreement on 28th March, 2010 Geely has agreed to pay USD 1.8 billion for Volvo Cars, which included a USD 200 million note with the balance paid in cash. Geely issued the note and paid USD 1.3 billion in cash for Volvo Cars, utilising financing from Chinese institutions and its own balance sheet as well as international capital market resources. The closing consideration reflects adjustments in areas such as pension obligations and working capital.
Under the new ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium; and its management will have the autonomy to execute on its business plan under the strategic direction of the board. As part of the transaction, Volvo and Ford will maintain close component and supply relationships, ensuring continuity in areas where they provide supply to each other. Completion of the acquisition, which followed more than a year of talks between Geely and Ford, was marked at a signing ceremony in London attended by Li Shufu and Lewis Booth, Chief Financial Officer at Ford.
Zhejiang Geely Holding Group Co. Ltd. was founded in 1986 with its headquarters in Hangzhou, China and is one of China’s fastest growing car makers.
Geely’s Li Shufu said: “This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars. 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.”
Stefan Jacoby, the new President and Chief Executive of Volvo Cars, said: “I am honoured to join a company with the prestige and growth potential of Volvo. 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.”