US auto giant Ford said Wednesday it had agreed the main terms for selling its Swedish brand Volvo Cars to Chinese carmaker Geely, in a deal that would underline China's growing economic clout.
Ford said a definitive accord would be signed early in 2010 with Geely -- a former refrigerator parts supplier that has grown into one of China's largest private carmakers since launching its auto business in 1997.
"Ford Motor Company confirmed today that all substantive commercial terms relating to the potential sale of Volvo Car Corporation have been settled between Ford and Zhejiang Geely Holding Group," Ford said in a statement.
The US company said it expected "a definitive sale agreement will be signed in the first quarter of 2010, subject to appropriate regulatory approvals."
The number-two US carmaker said work still remained before finalising the deal, including "final documentation, financing, and government approvals."
Ford said the deal would give Volvo, a premium brand renowned for its sturdy, effective cars and employing 22,000 people worldwide, the resources "to further strengthen the business and build its global franchise."
Geely said in a statement that Volvo would retain its leadership in safety and environmental technologies "should a stock purchase take place."
It also noted that Volvo "will be uniquely positioned as a world leading premium brand to exploit opportunities in the fast growing China market." Profile: China's Geely
Ford announced in October that Geely was the preferred bidder for the Swedish nameplate it had acquired for 6.4 billion dollars in 1999.
The news was welcomed in Sweden, where Volvo was founded in 1927.
"Our hope, and that of all of us who feel strongly about Volvo, is that (Geely) will be a strong and long-term owner and that it will make it possible to keep a lot of production here in Sweden," Swedish Prime Minister Fredrik Reinfeldt said then.
Out of its global workforce, Volvo has around 16,000 employees in Sweden.
Geely said Wednesday it had held meetings with labour representatives and government officials in Belgium and Sweden, where Volvo's production is based.
Swedish television reported Tuesday a deal was imminent between Geely and Ford, saying Ford and Geely were holding talks in London.
Swedish media said the deal had a 15 billion Swedish kroner (1.43 billion euros, 2.04 billion dollars) price tag.
The news of Volvo's sale comes as another Swedish automaker, Saab, faces uncertainty about its future.
Its parent company, General Motors, said last week it was shutting down the iconic marque.
But on Monday Dutch sportscar maker Spyker said it was extending indefinitely its renewed last-ditch bid to buy Saab from General Motors.
Spyker chief executive Victor Muller held talks with Saab unions Tuesday.