Ford draws near to Volvo sale

飞雪寒冰

Ford Motor will sign a deal to sell its Volvo cars business to Zhejiang Geely Holding Group as soon as this Sunday, three people close to the transaction said yesterday.

The Chinese carmaker will pay $1.8bn for Volvo. Another $750m of working capital is being raised for the Swedish marque.

About half of the financing for the overall deal is due to come from European banks and the other half from China, according to one of the people, who declined to be named because the announcement was pending.

Xi Jinping, China's vice-president, is due in Sweden on Saturday for a state visit. The person said the deal would probably be signed on Sunday or Monday.

飞雪寒冰

1. The deal will follow talks between Geely and Ford in the US carmaker's Michigan headquarters held last Friday.
   
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3. While both companies have overcome obstacles to the deal, last-minute hitches could delay its signing beyond the weekend, one of the people warned.
   
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5. Ford yesterday declined to comment, referring to former statements that it expected the deal to be signed by the end of the first quarter.
   
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飞雪寒冰

About $500m to $800m of the financing for the deal will come from the European Investment Bank, to be guaranteed by the governments of Sweden and Belgium, where Volvo has production plants. Roughly $500m will come from Swedish banks.

The remainder will come from Chinese banks, local governments and Geely itself.

The deal will mark the biggest purchase of a carmaker yet by a Chinese manufacturer, and the first-ever of a premium brand.