China's Geely inks $1.8B deal to buy Volvo cars

China's Zhejiang Geely Holding Group has signed a deal with the Ford Motor Corporation to acquire the US firm's Volvo vehicle unit.

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 Chairman Li Shufu (FRONT L) shakes hands with CFO of Ford Motor Company, Lewis  Booth (FRONT R) after signing a deal in Goteborg of Sweden, March 28, 2010. China's  Zhejiang Geely Holding Group signed a deal with Ford Motor Co. here on Sunday on the  takeover of Sweden's Volvo Cars.(Xinhua/Wu Wei)

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.

Li Shufu said, "We needed to find a new owner that would take the Volvo Cars business further but also, cherishing its unique Swedish brand values, who would also understand our responsibilities and values to our employees, and to the communities in which we work. I am very pleased to say that we believe we have found such an owner in Geely."

Under the definitive stock purchase arrangement, Geely will own 100 percent of Volvo, and the unit's related assets.