STOCKHOLM (AP) - Swedish truck maker AB Volvo says it will acquire a 45 percent stake in a new heavy-truck unit of China’s Dongfeng Motor Group Co. for a total amount of 5.6 billion yuan ($890 million)
Volvo CEO Olof Persson says the move to buy the stake in Dongfeng Commercial Vehicles was part of "a clear strategy" to become the world’s largest maker of heavy-duty trucks.
He said Saturday completion is expected within a year, adding it will increase Volvo’s net debt by approximately 6 billion kronor ($926 million).
Volvo was the world’s third largest truck manufacturer in 2011, with 180,000 units sold, while Dongfeng was second with 186,000 vehicles sold, according to the Swedish group.
AB Volvo’s third quarter profits plunged amid weak demand, especially in debt crisis plagued Europe.