Ford has agreed a deal to sell Volvo Cars to Chinese carmaker Zhejiang Geely Holding Group for $4.65 billion (£3.1 billion) less than it paid for the Swedish firm in 1999.
The independent Chinese company will pay $1.8 billion for Volvo, giving it a luxury car brand which is renowned throughout the world for its safety and quality. Last year China overtook the US as the world's largest car market, and companies there are keen to buy foreign brands to improve their competitiveness in a bid to improve technology and expand into overseas markets.
Ford paid $6.45 billion for Volvo at the end of the last century. Since 2008 it has been trying to offload Volvo to concentrate on its core Mercury, Lincoln and Ford brands.
Ford Chief Financial Officer Lewis Booth said: "We think it's a fair price for a good business, and yes, we're happy with the deal we've achieved with Geely."
Booth added that his company believes that, under Geely, "Volvo can continue to build its business and return to profitability".
The sale is expected to be completed in the third quarter, subject to regulatory approvals.
The deal also covers further agreements on intellectual property rights, supply, and research and development arrangements between Volvo Cars, Geely and Ford.
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