Ford Volvo sale to speed up; Geely reviews books

Ford Motor Co.'s sale of Volvo is gathering pace, as Geely Holding Group Co., China's biggest privately owned carmaker, and at least two more bidders review the automaker's books, three people familiar with the talks said.

Geely sent a team to Volvo's factory in Gothenburg, Sweden last month to scrutinize the automaker's financial records, said the people, who declined to be identified because the talks are private. Volvo Chief Executive Officer Stephen Odell told employees in an April 24 memo obtained by Bloomberg News his managers would meet potential buyers in coming months.

"Members of the Volvo Cars management team will participate in presentation meetings for interested parties visiting Volvo," Odell told employees in the memo. "For us at Volvo, nothing else will change for now."

Ford Motor Co. is seeking about $2 billion for Volvo, less than a third of what it paid for the maker of station wagons a decade ago, two of the people said. Ford, the only major U.S. automaker to avoid seeking federal aid, was battered by a record $14.7 billion loss last year, and seeking to raise cash. In December, the carmaker put Volvo up for sale after the Swedish brand's U.S. sales slid 31 percent.

"We have no new news on Volvo," Ford Chief Executive Officer Alan Mulally told reporters at a Michigan car factory on May 6. The sale of the Swedish automaker "is the next step in the process."

Ford rose 41 cents, or 7 percent, to $6.26 at 4:15 p.m. in New York Stock Exchange composite trading. The closing price was the highest since June 19.

Third Overseas Purchase

The inspections bring Geely a step closer to making its third overseas purchase since 2006. The firm first approached Ford more than a year ago, before the automaker was prepared to sell. Chinese automakers including Guangzhou Automobile Group Co. are seeking access to global technologies and foreign brands through acquisitions to improve the quality of their vehicles.

Wang Ziliang, a spokesman for Zhejiang, Hangzhou-based Geely, couldn't be reached on his mobile phone today.

Chongqing Changan Automobile Co., China's second-biggest maker of minivans, said in a statement yesterday it isn't planning a bid for Volvo.

Geely submitted a formal bid in March, one of the people said. The company aims to boost sales to 2 million units by 2015 from 219,512 units last year. To reach the target, Geely has said it plans to have more than 40 new products over the next six years.

Founder Li Shufu said in March the company is "closely following" developments in the global auto industry and will consider "all sorts of strategic choices." He hired Yin Daqing, formerly with the S.T. Dupont SA China venture, in 2004, and Zhao Fuquan, a former DaimlerChrysler executive, two years later.

Li's Acquisitions

Li, who is from the eastern Zhejiang province, started his business in 1984 with a factory making refrigerator parts. He expanded into the automobile business in 1996 and won government approval five years later for the first privately owned carmaker in the country.

Under Li's leadership, Geely has revamped its product lines since May 2007 by stopping manufacturing of low-cost vehicles, and introducing new models that appeal to high-end consumers.

In March, Geely said it would pay $32.9 million to buy Drivetrain Systems International, the second-biggest independent automatic transmission maker in the world. The acquisition was followed by a 53 million-pound ($101 million) investment in Manganese Bronze Holdings Plc in 2006, which made Geely the then-largest stakeholder in the maker of London's black cabs.

Ford sold U.K.-based Jaguar and Land Rover to India's Tata Motors Ltd. for $2.4 billion in June. It sold its Aston Martin line for $931 million in May 2007 to a group of investors.