As Volvo sale nears, another win for Ford
Ford (NYSE:F) has been shopping its Volvo unit for months. Some Wall Street analysts thought the American car maker needed the money. Now that Ford's sales in the U.S. are improving, that may not be the case. Ford has done remarkably well, so why not another stroke of good luck in finding a buyer for the Swedish auto unit?
A bidding war of sorts has begun for the assets of the Swedish car company. According to several media reports, a group of local investors wants to bring the ownership of Volvo home. Another possible buyer for Volvo is Chinese car company Geely. The Swedes would probably prefer that one of its iconic brands not be owned by a firm based in China.
Ford is dumping Volvo because its sales are very poor. That may be why the Swedes are having trouble raising money to buy the company back. The Chinese do not have that problem. Geely would not be making a bid without the permission and probably the financial support of the central government.
Because of its access to money Geely should be considered the front runner, which means that a Western car company will end up in Chinese hands for the first time ever.
Douglas A. McIntyre is an editor at 24/7 Wall St.