CRI听力: Ford Brokers Deal to Sell Volvo to Chinese Automaker Geely

After months of negotiations and numerous trips to the bargaining table, Ford announces a deal is within reach to sell its money-losing Volvo unit to Chinese automaker Geely.

The America's 2nd largest vehicle manufacturer says that work on financing and government approvals remains to be completed, and that it expects the deal to close in the second quarter of 2010.

Shuangfeng has the details.

Ford confirmed Wednesday that it's green lighting the sale of the Swedish Volvo brand to Geely.

In a brief statement, Ford said that all substantive commercial terms relating to the potential sale of Volvo Car Corporation have been settled between the two sides.

The news sent Ford's stock above 10 U.S. dollars a share for the first time since 2005.

The estimated 1.8 billion US dollar deal would be the largest overseas acquisition by a Chinese automaker.

Li Shufu, CEO of Geely, also confirmed the news. He said owning Volvo will give Chinese automakers a great opportunity to make their way to the highest levels of automotive technology industry in the world.

"Ford and Geely have already finished business negotiations. Next we will focus on discussing the specifics of the sale. Ford's sale will make China's auto industry gain the highest safety techniques and energy-saving and environmental protection technology, which is most significant to China."

On the management of Volvo, Li Shufu said in the transition period, the original Volvo management group will remain as well as the factory facilities and enterprise culture.

"Geely is still Geely. Geely and Volvo are two different brands with different technology. They also have two completely leading and managing teams, targeting at different groups of customers. They are not simple add-up and divided by two."

Ford bought the Swedish carmaker in 1999 for 6.5 billion dollars, and was forced to shed the money-losing subsidiary in its taxpayer-subsidized bankruptcy.

Per-Erik Sandlund, the Swedish director-general of Official Investment Promotion, said he believes the deal will benefit not only China and Sweden, but also the whole world.

"Volvo is the world great car brand; it has the problem because of the economic recession of the world. We can see that the emerging economies, like China and India and the South of America are in need of new car."

Analysts say this deal is only one step forward, and Geely still needs to resolve a great number of difficulties ahead. How to help Volvo turn losses into gains will be the crucial issue once the deal is closed next year.

Shuangfeng, CRI news.