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Volvo sold to China's Geely

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14:56 CEST+02:00
Chinese car maker Zhejiang Geely Holding has signed a deal to buy Sweden's Volvo Cars from US auto maker Ford.

"I can confirm that a final agreement on the sale of Volvo to Geely was signed at 2:40 pm," Volvo Cars spokesman Per-Åke Fröberg told AFP ahead of a news conference due around 3.30pm.

The deal was signed at Volvo headquarters in Gothenburg by Ford's financial director Lewis Booth and Geely's president Li Shufu, Froeberg said.

Booth confirmed that the sale was for $1.8 billion, less than a third of the $6.4 billion Ford paid for Volvo Cars in 1999.

Volvo has 22,000 employees worldwide, including 16,000 in Sweden.

Ford Motor Company announced in December that it had agreed on the main terms of the sale of its loss-making Swedish subsidiary Volvo Cars to Geely, one of China's largest private automakers.

The deal will bring to an end Ford's decade-long association with the premium Swedish brand, known for its sturdy, family-friendly cars.

Volvo unions had earlier voiced opposition to the deal on grounds that it was vague on expansion plans and possible layoffs.

Three Volvo unions this week pressed for details "on the capital that will finance Volvo's daily activities, investment on future projects and the production target of 600,000 vehicles by 2015."

But on Saturday they pronounced themselves satisfied.

Ford had said it anticipated "a definitive sale agreement will be signed in the first quarter of 2010, subject to appropriate regulatory approvals".

Geely reportedly secured the financing needed for the purchase earlier this month, which the Financial Times valued at about $1.8 billion.

The newspaper said more than a billion would be loaned by the European Investment Bank and the Swedish and Belgian governments.

The Swedish media had questioned the ability of Geely, a relatively young player, to finance the takeover.

The deal was a "leap in the dark," said the Dagens Nyheter newspaper, the day after the accord was announced.

But Svenska Dagbladet said on Saturday that Geely's chairman had given guarantees that all research and development activities would remain in Sweden and that production would first be assured by plants in Sweden.

Geely chairman Li Shufu has previously told Chinese news agency Xinhua that nothing will change for Volvo, except the boss turns him.

"Volvo and Geely will be two independently-managed brands," he said.

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