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Volvo Sale To Geely Looks Near
SHANGHAI, China — Independent Chinese automaker Geely is expected to sign a definitive deal to acquire Sweden’s Volvo Car from Ford on February 8, according to media reports in China.
Geely and Ford have been negotiating the potential sale of the money-losing Volvo operation for months. The final sale price is estimated between $1.5 billion and $2.0 billion, according to the Shanghai Daily.
Ford purchased Volvo in 1999 for $6.5 billion and since then has poured billions of dollars into the company.
Late last year, Ford said that it had settled most of the substantive issues related to the deal. Chinese media reported that government regulators in Beijing, including the important National Development and Reform Commission, have given their support.
The deal is expected to be closed in May, press reports said.
In the meantime, the Shanghai Daily, quoting an unnamed source, said Geely plans to nearly double Volvo’s annual global production by building a new factory outside Beijing and expects to return Volvo to black ink by 2011.
The Chinese Web site 163.com reported that the XC60 crossover might be the first Volvo model to be produced in China by Geely.
The Volvo S40 and S80 sedans currently are assembled in Chongqing by the Chang’an Ford Mazda joint venture.
Inside Line says: It appears that major assets of both Swedish auto firms — Volvo and Saab — may wind up in the hands of Chinese automakers. — Hu Lei, Correspondent
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