DEARBORN, Mich. - Ford Motor Co. said yesterday that it will sell 81 percent of Kwik-Fit Holding PLC to CVC Capital Partners for 330 million pounds ($505 million), a third of what the automaker paid for Europe's largest car-repair chain three years ago.
The world's second-largest automaker said in January that it would sell the business and two others in the United States to help raise $1 billion in its effort to stem losses and focus on automaking. Ford bought Kwik-Fit for 1.01 billion pounds in 1999 as then-Chief Executive Officer Jacques Nasser expanded into car-service businesses to try to boost profit.
Ford said it would incur third-quarter costs of about $500 million from the Kwik-Fit sale. Analysts had expected a Ford loss in the quarter, after a $570 million profit in the previous three months.
The automaker, under CEO William Clay Ford Jr., is selling assets, cutting jobs and closing factories to try to rebound from last year's $5.45 billion loss.
"Ford failed with their strategy of expanding in the service business in Europe," said Michael Raab, a Bank Sal Oppenheim analyst. "They need the money as a cash cushion, given the state of the North American market."
The automaker "paid a market price for Kwik-Fit in 1999, and we sold it for a market price," said Ford spokesman David Reuter. "We didn't overpay. The markets have changed over the last couple of years."
Ford will keep a 19 percent stake in Kwik-Fit, which had sales last year of 762 million pounds.
The automaker and London-based CVC Capital, which operates Europe's biggest buyout fund, expect to complete the transaction in the fourth quarter.