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Volvo Purchases 40 Million Shares of Nissan Diesel Stock

Wed April 05, 2006 - National Edition
CEG



AB Volvo March 21 acquired 40 million common shares, corresponding to 13 percent of the shares, in the Japanese truck manufacturer Nissan Diesel from Nissan Motor, with an option to acquire the remaining 6 percent of the shares from Nissan Motor within four years.

The purchase price is approximately $193 million.

The transaction strengthens Volvo’s Asian strategy and is intended to provide Volvo with access to Nissan Diesel’s dealer and service network in Japan and Southeast Asia, and create a possibility for further industrial cooperation with Nissan Diesel in such areas as engines and transmissions.

Volvo and Nissan Motor also are going to assess the possibilities for cooperation in the commercial vehicle business in China together with Dongfeng Motor Co. Ltd.

Nissan Diesel is Japan’s fourth largest manufacturer of heavy and medium-heavy trucks, with an annual production of slightly less than 40,000 trucks in 2005. More than 90 percent of Nissan Diesel’s sales are made through its own dealers and Nissan Diesel has a well-established dealer and service network in Japan, as well as in the rest of Southeast Asia.

“Nissan Diesel has undergone a major and positive change in recent years and is today one of Asia’s leading manufacturers of trucks,” said Volvo President and CEO Leif Johansson.

“Nissan Diesel’s and the Volvo Group’s products and geographical coverage complement one another and this transaction opens possibilities for cooperation within production, sales and aftermarket.”

Deputy CEO of the Volvo Group Jorma Halonen will be proposed as board member of Nissan Diesel.

With its 19 percent, Nissan Motor has been the largest owner of Nissan Diesel, which is listed on the exchange in Tokyo. Nissan Motor also owns 50 percent of the Chinese vehicle manufacturer Dongfeng Motor Co. Ltd., which is China’s largest producer of trucks, with an annual production of approximately 170,000 trucks, and one of the largest automotive manufacturers in China.

This joint venture covers both commercial vehicles and cars. Nissan Motor, Volvo and Dongfeng Group intend to, together with Chinese authorities, evaluate how to best develop this joint venture in the area of commercial vehicles.