A US-led consortium is challenging Geely Automobile of China in the race to buy Volvo, the lossmaking Swedish carmaker, from Ford.
The Crown consortium is fronted by Michael Dingman, a former Ford director and veteran turnround specialist, and Shamel Rushwin, a former executive at Ford and Chrysler, according to people close to the sale.
Financing has been fully secured from US private equity groups, but the consortium is seeking additional backing from Swedish investors to signal its commitment to keep Volvo in the country.
The consortium faces competition from Geely, the Hong Kong-listed Chinese carmaker, which last month confirmed its interest in Volvo. A person close to the sale said Geely had offered just under $2bn for the unit.
Another informed person said the US consortium had offered Ford significantly less than Geely, but that both bids involved similar plans for more than $3bn of additional investment in Volvo after completion of any deal.
People close to the sale said Geely was frontrunner because of its larger bid, but claimed Crown was the most credible alternative, should the Chinese company fail to reach a deal.
A group known as the Jakob Consortium, led by Magnus Sundemo, head of Volvo’s engineers’ union, has also expressed interest, but people close to negotiations said it was struggling to raise financing.
Ford was expected to decide in the next few weeks whether to enter exclusive talks with Geely, according to one person involved. He and others said protection of Ford’s intellectual property was the biggest obstacle to a deal with Geely.
Similar concerns played a role in thwarting a bid this year by Beijing Automotive Industry Holding Co for 51 per cent of General Motors’ Opel division.
Ford is determined to sell Volvo, which lost $231m in the second quarter, as part of Ford’s chief executive Alan Mulally’s drive to focus on its core mass-market business.
Crown is talking to potential Swedish investors about taking up to a one-third stake in the consortium.
Mr Dingman was one of Wall Street’s best-known corporate turnround experts in the 1980s and later invested in several controversial privatisation deals in Czechoslovakia in the early 1990s. He was a director of Ford for 21 years until 2002
Volvo declined to comment and Ford, which has not been divulging details of the sale, could not be reached.
Source: Financial Times