U.S. carmaker Ford said it expected to close a deal to sell Volvo Cars to China's Zhejiang Geely in the second quarter of 2010, in the latest in a string of deals between Asian and Western carmakers.
Chinese carmakers are taking advantage of a crisis-sparked shake-up of the auto industry, tapping into Western brands in a bid to boost their technology and take advantage of a fast-growing home market. China car sales are expected to overtake the U.S. when full-year figures are published.
Ford said in a statement it did not expect to retain a stake in the Swedish unit after the sale.
Geely said in a statement that the substantive commercial terms of the agreement had been settled, and that Geely expected to sign a definitive stock purchase agreement with Ford in the first quarter of next year, paving the way for completion in the second quarter, subject to regulatory approval.
Further discussions will focus on finalization of documentation and financing, as well as government approvals, Geely said in a statement.
Zhejiang Geely was named by Ford as preferred bidder for Volvo in October.
The estimated $1.8 billion deal would be the largest overseas acquisition by a Chinese automaker.
China's BAIC on Wednesday said it would launch an aggressive campaign to develop its brand at home and abroad after buying car designs from GM's Saab unit.
(Reporting by Jens Hansegard; Additional Writing by Helen Massy-Beresford; Editing by Hans Peters and Jon Loades-Carter)