China's Geely Completes Deal to Acquire Volvo

Geely Holding Group completed its acquisition of Ford Motor Co.'s Volvo unit Monday in a $1.5 billion deal, according to Associated Press.

The Swedish automaker is China's biggest foreign auto acquisition and an unusually large deal for a private Chinese company.

Geely agreed in March to buy Volvo from Ford (NYSE: F), which sold its European brands to raise cash and focus on its core Ford and Lincoln units. Geely said it paid $1.3 billion in cash plus a $200 million note, which is less than the $1.8 billion price announced in March due to changes in pension obligations and working capital.

Geely founder and chairman Li Shufu said in March that Geely expected to spend up to $900 million to return Volvo to profitability.

Geely said the chief executive of Volkswagen's U.S. arm, Stefan Jacoby, has been named president and chief executive of Volvo Cars. He succeeds Stephen Odell.

Ford acquired Volvo in 1999 for $6.45 billion but has been trying to unload it since 2008 to raise cash and focus on its two remaining core brands.

Ford sold sold its Jaguar and Land Rover brands to India's Tata Motors Ltd. in June 2008 for $1.7 billion, and it sold Aston Martin to a private equity group in 2007 for $931 million. Ford also plans to stop producing its Mercury brand by the end of this year.

Ford said last week that Volvo made $53 million in the second quarter, a $290 million improvement from the second quarter of 2009. Volvo sold 191,000 cars and SUVs in the first half of this year, up 29 percent from last year.