Ford has moved a step closer to a sale of its loss-making Swedish brand, Volvo Car Corp, opening detailed discussions with potential buyers, it said in a message to Volvo employees on Wednesday.
Ford, grappling with the deepest downturn in U.S. auto industry sales in 27 years, is considering a sale of the business. It has already sold the rest of its premier auto group, Aston Martin, Jaguar and Land Rover.
We've had contact with a number of parties who've expressed interest concerning the future of Volvo. Ford's been pleased with the number and quality of those parties, John Gardiner, Ford's European director of strategic communications said, citing a message sent to Volvo employees earlier on Wednesday.
We've had preliminary discussions to determine the level of interest in the Volvo business that they have and we're now talking in more detail to those parties about the future for Volvo, he said.
Gardiner said the process could lead to a sale of the business but no final decision had been taken and negotiations would take some time. He declined to identify the parties.
By 1456 GMT (10:56 a.m. EDT), shares in Ford were up 4.26 percent to $2.94, outperforming a 2.15 percent rise in the S&P 500.
Earlier this month, a source familiar with the matter said up to five potential bidders, including Chinese firms, were in discussions over Volvo.
The field of bidders would be narrowed pretty significantly by May, when they would receive more information and be asked to think through indications of interest, the source added.
Last month, a source with direct knowledge of the matter said Chinese carmaker Chery Automobile had held talks with Volvo.
Swedish business newspaper Dagens Industri, citing undisclosed sources, has also named Chinese car makers Dongfeng Motor Group and Chongqing Changan Automobile Co, and a European constellation as potential buyers.
Ford's Detroit rival, General Motors, is also seeking to sell its Swedish unit, Saab Automobile. Saab, which is in creditor protection, said earlier this month its suitors include Swedish and Chinese parties.
Volvo recorded a fourth-quarter pretax loss of $736 million as its revenue fell 35 percent to $3.3 billion.
Citigroup and JPMorgan are advising Ford.
(Additional reporting by Jui Chakravorty Das in New York; Editing by Jon Loades-Carter and Andrew Macdonald))