BUCHAREST, Romania (AP) — Ford Motor Co. will pay $77.9 million for a 72 percent stake in the state-owned Romanian assembly plant Automobile Craiova, a finance ministry official said Friday.
Ford of Europe produced 1.86 million vehicles at seven assembly plants in 2006 and additional manufacturing space is needed to meet ambitious new product and growth plans.
The company pledged to increase production at Automobile Craiova from about 24,000 cars and 116,000 engines last year to 300,000 cars and 300,000 engines. Ford said it would increase the number of employees from 3,900 to between 7,000 and 9,000. Ford's investments to upgrade and modernize the site would reach $1.37 billion by 2012, it said.
Ford, which was the only bidder for the Craiova plant, made an initial financial offer of $75.2 million for the shares, which it later raised, said Sebastian Vladescu, a state secretary in the Finance Minister and privatization official.
The government and Parliament need to approve a special law for the privatization to meet certain requirements of the automaker, based in Dearborn, Mich.
Ford had said in July that it would spend $923 million developing the former Daewoo car factory into a major facility for its vehicle and engine production requirements.
Romania paid $60 million last year to buy a 51 percent stake in the company from Daewoo's creditors. The government will maintain partial ownership after it sells the controlling stake to Ford.
Vladescu said he expects the deal to be signed next week.