HANGZHOU, China and GOTHENBURG, Sweden — Zhejiang Geely Holding Group Co. Ltd. (Geely Holding Group) announced Monday that it completed the acquisition of Volvo Car Corporation (Volvo Cars) from Ford Motor Company.
Geely also announced that Stefan Jacoby, the chief executive of Volkswagen Group of America, would become president and chief executive officer of Volvo Cars.
"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," said Li Shufu, chairman of Geely Holding Group.
"I am honored 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," Jacoby said.
Following completion of the transaction, Jacoby will join the board of Volvo Cars, which will be chaired by Li. 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 March 28, 2010, Geely has agreed to pay $1.8 billion for Volvo Cars, which included a $200-million note with the balance paid in cash.
Geely issued the note and paid $1.3 billion in cash for Volvo Cars, utilizing 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.
"The signing and completion of this acquisition reflects the commitment of Ford and Volvo executives to the future of this company, along with the vital input of labor representatives and government officials in Sweden, Belgium and China as well as other relevant countries," said Li.
Jacoby will succeed Stephen Odell as Volvo Cars' president and chief executive, taking up his role on Aug. 16, 2010. Hans Oscarsson, deputy chief financial officer, will become acting CFO of Volvo Cars, replacing Stuart Rowley. Odell and Rowley are moving to leadership roles at Ford of Europe.
Along with the new management team at Volvo Cars, Geely also named the full board of directors for the Swedish carmaker, comprising:
Li Shufu (Chairman)
Hans-Olov Olsson (Vice-Chairman)
Freeman H. Shen
Dr. Herbert Demel
Lone Fonss Schröder
Winnie Kin Wah Fok
The board, which will include three labor representatives nominated by unions at Volvo Cars, will assume its duties on completion of the transaction.