Ford has entered into a definitive agreement to sell Volvo Car Corporation to Chinese carmaker Geely. The sale is expected to close in the third quarter of 2010, and is subject to customary closing conditions, including receipt of applicable regulatory approvals. The purchase price for Volvo and related assets (mainly intellectual property) is US$1.8 billion.

Ford said that it will continue to cooperate with Volvo in several areas after the sale has been completed in order to ensure a smooth transition, but will not retain any ownership. Following completion of the sale, Ford will continue to supply Volvo Cars with powertrains, stampings and other vehicle components. The Detroit automaker is also committed to provide engineering support, information technology and access to tooling for common components, among other services for a “transition period to ensure a smooth separation process”.

Both parties have established agreements to govern the use of intellectual property, which will “allow both Volvo and Ford to deliver their business plans and provide appropriate safeguards against misuse”. The agreements are said to allow Volvo to grant sublicenses to certain portions of Ford’s intellectual property used by Volvo Cars to third parties, including Geely. Looks like Geely cannot simply pick off tech from the Volvo tree, even though they own it.

Stephen Odell, CEO of Volvo Cars, said: “The Volvo management team fully endorses Ford’s sale of Volvo Cars to Geely. We believe this is the right outcome for the business, and will provide Volvo Cars with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future.

“Geely has been very supportive of Volvo Cars’ business plans and management team. We look forward to building a strong relationship between Volvo Cars and Geely, and to maintaining a strong relationship with Ford in those areas where we will continue to work together to ensure a smooth transition,” he added.