PE-backed China auto company Geely buys Volvo from Ford

Backed by GS Capital Partners, the private equity division of Goldman Sachs, Geely is to acquire 100 per cent of the Volvo Car Corporation, along with additional assets and intellectual property. The transaction is expected to close in the third quarter of this year.

Ford president and CEO Alan Mulally said, “Volvo is a great brand with an excellent product line-up.  This agreement provides a solid foundation for Volvo to continue to build its business under Geely’s ownership.”

Volvo will remain headquartered in Sweden, according to Geely chairman Li Shufu. He pledged to try and preserve the company’s existing Swedish manufacturing facilities, but said that new premises would also open in China.

“Volvo will be run by Volvo management. It will have the strategic independence to develop its business plan, and we are determined to preserve the distinct identity of the Volvo brand,” said Shufu.

“We regard Volvo as a Swedish business with a strong Scandinavian heritage, and we will preserve that under a management team headquartered in Gothenburg and led by Volvo executives.”

GS Capital partners took a $244.76m stake in Geely automobile holdings in September 2009, representing 15.1 per cent of issued share capital.

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