Ford has sold Volvo to Chinese car maker Geely for $1.89 billion (£1.2bn), taking a £3.14bn hit on the car maker it bought back in 1999 for £4.34bn.
The agreement means Ford can finally rid itself of Volvo, which hasn't turned a profit since 2005, but the deal to sell the Swedish car maker and its assets to Zhejiang Geely Holding Group will be tied up in (mostly Chinese governmental) red tape until autumn this year.
All but $200m of the deal will be paid for in cash and, after completion, Ford will have no remaining investment in Volvo. It will continue to supply powertrains, vehicle components and stampings for Volvo for an unspecified period of time, however.
"We are pleased to have reached this agreement with Ford, enabling us to safeguard and strengthen Volvo's renowned brand heritage," said Geely Chairman Li Shufu in a statement. "This transaction will ensure Volvo's continued leadership in the premium segment, where it enjoys a global reputation for safety and environmental-friendly technologies.
"This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design. As part of the proposed transaction, Zhejiang Geely Holdings will maintain the strong collaborative relationships that Volvo has built with employees, unions, suppliers, dealers and above all, customers."
"Volvo is a great brand with an excellent product line-up. This agreement provides a solid foundation for Volvo to continue to build its business under Geely's ownership," said Ford boss Alan Mulally. "At the same time, the sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world."