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Ford in Talks for Sale of Volvo Unit: Report

The U.S. automaker is in preliminary talks to sell its Volvo Car unit to China's Geely Automobile, a report says.
Author:

Ford

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is in preliminary talks to sell its Volvo Car unit to China's

Geely Automobile Holdings

,

Bloomberg

reports, citing people familiar with the discussions.

Ford likely will get less than the $6.4 billion it paid for Volvo in 1999, said one of the people. Ford also has approached Chery Automobile and Chongqing Changan Automobile, according to

Bloomberg

.

Spokesmen from Ford and Geely declined to comment for

Bloomberg

.

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Geely, a maker of compact cars, first approached Ford about buying Volvo a year ago, before Ford had decided to sell the Swedish auto unit,

Bloomberg

reports. Preliminary talks began in December after Ford said it would consider selling the unit.

Geely has received permission from China's National Development and Reform Commission to study the acquisition.

Despite losing $5.9 billion in the fourth quarter and $14.6 billion in 2008, Ford reiterated last week it has no plans to seek a government bailout, unlike U.S. competitors

General Motors

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and

Chrysler

, and will tap an earlier-secured credit line.

Ford is looking to sell Volvo as a way to raise cash to avoid a federal bailout,

Bloomberg

notes.

This article was written by a staff member of TheStreet.com.