Volvo sale to Chinese Geely Corp approved 07/30/2010
Ford Motor Company's deal to sell its Volvo brand to the China-based Geely Holding Group was struck months ago, but the deal was pending approval by the Chinese government.
According to the Associated Press, the deal has cleared the last hurdle, with an unnamed government official telling the news source that the $1.8 billion dollar transaction had been approved.
"This was the final stage of the government approval," he said. "There are no conditions attached."
Geely originally agreed to acquire Volvo in March. The Chinese company is comparatively small, but hopes the brand name and technology will make it a global player.
Auto industry analysts are still unsure over Geely's credentials to revive the Volvo brand, which has lost money in recent years.
"The uncertainty here lies on the differences of the two companies and Geely's lack of experience," said Xing Haizhi, an auto analyst for Cinda Securities in Beijing.
Ford has streamlined its business as part of its turnaround, settling on its main fleet and Lincoln luxury badge. It sold its Jaguar and Land Rover brands to the Indian Tata Motors and has made the decision to discontinue Mercury.