LONDON (Thomson Financial) - The Ford Motor Co is preparing to sell Volvo,
the Swedish car group it bought eight years ago, in a move that could raise 8
bln usd (3.9 bln stg) for the Detroit car giant, The Sunday Times and The Sunday
Telegraph reported.
City sources told The Sunday Times that a decision in principle to sell
Volvo was taken a fortnight ago, but that the timing of the sale had yet to be
decided, according to the newspaper. No bank had been appointed to handle the
transaction, the article added.
"Ford won't confirm it officially [the Volvo sale], but the company has
taken the decision to sell Volvo in the longer term. It is by far the most
attractive asset," another source told The Sunday Telegraph.
Volvo is the flagship of Ford's Premier Automotive Group, a stable of luxury
European marques it built up during an expansionist phase in the 1980s and
1990s.
It began dismantling the group last year when it faced a bleak financial
situation in its core business. It sold Aston Martin earlier this year in a deal
worth 479 mln stg, and this week it will receive indicative bids for Jaguar and
Land Rover.
Volvo is larger than Aston Martin, Jaguar and Land Rover. It employs 27,500
people and makes about 500,000 cars a year at plants in Sweden and Belgium.
Ford paid 6.95 bln usd for Volvo in 1999, buying it from Volvo AB, the truck
maker.
Analysts estimate Ford might receive 8 bln usd in a sale, but pointed out
that the dollar had weakened in the intervening years, The Sunday Times said.
Automotive industry sources said the timing and speed of the sale would
depend on the level of interest that came from rival carmakers and
private-equity groups, according the newspaper.
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