Volvo Will Get another Bidder
By Brendan Moore
Swedish newspaper Dagens Industri has reported that a former Ford Motor Company board member is leading a consortium that intends to offer a bid for Volvo this week.
Ford recently identified Geely, a large Chinese automaker, as their preferred bidder for their Swedish subsidiary Volvo.
Michael Dingman, the former Ford board member, leads a U.S. consortium called Crown that has substantial Swedish backing. Dingman was a board member from 1981 to 2002, until he had to retire due to the mandatory retirement age requirement.
Former Volvo CEO Roger Holtback is also part of the Crown consortium.
Reports from Sweden indicate that Crown’s bid will be somewhere between $2 billion and $2.5 billion USD. Dagens Industri quoted a Crown source as commenting, “There is no point in bidding low. You are not going to win anything that way.”
Geely’s bid is also reportedly in the same range.
Due to cost-cutting measures, Volvo’s losses continue to decrease. Volvo Cars lost only $135 million USD this past quarter, compared to $458 million in the same quarter in 2008.
Some auto analysts have expressed the opinion that a sale of Volvo may mirror the previous sale of Aston Martin by Ford in that Ford may be selling a company that is now digging itself out of a sales slump, and therefore will end up as a bargain for the new owner through a matter of timing.
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