Volvo Cars, to China’s Geely

China’s Zhejiang Geely Holding Group has signed a deal with the Ford Motor Corporation to acquire the firm’s Volvo Cars.

Geely, China’s largest private-run car manufacturer, has agreed to buy Ford’s Volvo automobile unit for 1.8 billion US dollars the country’s largest overseas vehicle sector acquisition.

Geely’s founder and chairman, Li Shufu, and Ford’s executive vice president, Lewis Booth, inked a binding agreement on Sunday at Volvo’s headquarters in Göteborg, Sweden.

Geely was reported to have approached Ford in mid-2008 about a possible takeover of Volvo Cars. On October 28, 2009, Geely was named as the preferred buyer of Volvo Cars by Ford.

On December 23, 2009, Ford confirmed that all substantive commercial terms for the sale to Geely had been settled. A definitive agreement was signed on March 28, 2010 worth $1.8 billion, with the deal expected to be closed by Q3 2010.

Although questions remain on whether and how the 24-year-old Geely would swallow the 84-year-old Volvo, the takeover offers a bright future to both buyer and seller. The deal will write a new chapter for Chinese enterprises to go global.

It is a win-win wedding in terms of the world auto industry. China overtook the United States to become the world’s biggest car market last year as sales saw a 46-percent growth to reach 13.6 million units despite the global recession.

Ford Motor Company press release

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