LONDON/DETROIT (Reuters) - A U.S.-led group that includes former Ford Motor Co (F.N) director Michael Dingman is in talks to acquire the automaker’s money-losing Volvo brand, a source familiar with the matter said on Monday.
The group, called the Crown consortium, has been in talks with Ford over Volvo for some time, said the source, who asked not to be named because the discussions are private.
The discussions raise a potential rival bid for Volvo to that of China’s Geely Automotive (0175.HK), which confirmed in September an interest in the Swedish brand.
Ford, the only large U.S. automaker not to restructure under a government-supported bankruptcy this year, in December said it was considering selling Volvo. The automaker has been divesting brands to focus on Ford, Mercury and Lincoln and conserving cash to support a turnaround.
A Ford spokesman said the automaker was in discussions with parties interested in acquiring Volvo. He declined to identify the parties or to comment on the potential timing of any sale.
“We will provide an update as soon as we have something to say,” Ford spokesman Mark Truby said.
The Financial Times first reported the Crown consortium’s interest in the Volvo brand and said the group was fronted by Dingman and former Ford and Chrysler executive Shamel Rushwin.
Dingman served on Ford’s board from 1981 to 2002, when he reached its mandatory retirement age.
The FT said the consortium had fully secured financing from U.S. private equity groups and was seeking additional backing from Swedish investors to signal its intent to keep Volvo in the country, citing people close to the sale.
The FT reported another informed person as saying the U.S. consortium had offered significantly less than Hong Kong-listed Geely, but that both plans involved similar plans for more than $3 billion of additional investment in Volvo.
The FT quoted a person close to the sale as saying Geely had offered just less than $2 billion for Volvo. Other media reports have put the price tag at about $2.5 billion.
The timing of the sale remains unclear. Ford has been restructuring Volvo to cut costs and to separate its operations to run on a stand-alone basis. It started discussions on the sale of Volvo in the first quarter of this year.
The unit was designated as held for sale during the first quarter, meaning that Ford expected to sell it within a year, but the process has moved at a deliberate pace.
Volvo is the last brand left at Ford from the automaker’s former premier auto group. Ford previously sold off Aston Martin, Jaguar and Land Rover, but has continuing relationships with each brand and likely would retain ties to Volvo also.
The process of separating Jaguar and Land Rover from Ford for the sale to Tata Motors (TAMO.BO) required working out continuing relationships that may be even more extensive between Ford and any new owner of Volvo.
As a result, Ford’s interests run beyond transaction price to the long-term financial stability of Volvo.
A Volvo spokeswoman declined to comment.
Reporting by Jon Carter, Quentin Webb and David Bailey; Editing by Jan Paschal, David Holmes, Gary Hill