(Bloomberg) -- Ford Motor Co. plans to complete its sale of Volvo Car Corp. to China's Zhejiang Geely Holding Co. next week, finishing the U.S. automaker's exit from European luxury brands, according to two people familiar with the plans.
Ford is selling Volvo to Geely for $1.8 billion, less than one-third of what it paid for the Swedish automaker in 1999. Ford and Geely executives are aiming to close the sale next week, pending final regulatory approvals and financing, said the people, who asked not to be identified revealing internal plans.
Unloading Volvo would complete Ford CEO Alan Mulally's strategy of exiting European luxury lines to focus on Ford's namesake brand.
“Any time you're marrying a commoner to a blueblood, that marriage is going to be hard to maintain and sustain,” said Rebecca Lindland, an analyst for IHS Automotive in Lexington, Massachusetts. “It's a shame because the Volvo-Ford marriage was one of the strongest because their car buyers had similar characteristics.”
Volvo had pretax profit of $53 million in the second quarter, compared with a $237 million loss a year earlier, Ford said last week. Ford, the only major U.S. automaker to avoid bankruptcy last year, posted net income of $2.6 billion in the second quarter, exceeding analysts' estimates by 66 percent.
“We expect to complete the Volvo sale in the third quarter,” John Gardiner, a Ford spokesman, said in an e-mail. He declined to comment on whether the sale will close next week.
Tim Burt, a London-based spokesman for Geely, declined to comment on the timing of the completion.