Swedish truck maker AB Volvo on Tuesday made a 7.5bn kronor (EUR810m $US1.07bn) offer to take over Japan’s Nissan Diesel in a strategic move aimed at gaining a solid presence in Asia.
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The move, which would raise Volvo’s stake from the current 19% to full ownership of Nissan Diesel, highlights the company’s ambitions in Asia’s burgeoning truck market, where Volvo has lacked a local brand while owning Mack Trucks in the US and Renault Trucks in Europe, the Associated Press (AP) reported.
AP noted that Volvo is the world’s second-largest truck maker after DaimlerChrysler while Nissan Diesel is Japan’s fourth-largest truck maker.
In a statement, Nissan Diesel president Iwao Nakamura said his board fully supported the move which would give the Japanese firm additional funding while sharing the development costs of new technology such as low-emission engines.
The statement said Nissan Diesel would retain its corporate structure and management personnel in Japan and both Nissan Diesel and the UD brand will be represented in the new company structure as a brand equivalent to Volvo Truck, Renault Truck, and Mack Truck.
“Nissan Diesel will be regarded as a core company and play an important role in the Asia strategy of Volvo group and the required investments will be promptly made,” the statement added.
The 540 yen (EUR3.44; $4.52) cash per share offer, which represented a premium of 32% based on the Japanese company’s average share price during the past three months, both sides said, according to the Associated Press.
“With Volvo as owner, Nissan Diesel gains the resources and the financial stability needed to fully capitalise on the opportunities that a closer cooperation offers to both parties,” Volvo chief executive Leif Johansson said in a statement cited by the news agency. If approved by antitrust authorities, the deal would be completed by 29 March, Volvo said.
According to AP, Volvo on Tuesday said a joint study identified gains amounting to EUR200m ($263m) annually for the next five years, mainly as a result of increased purchasing volumes, but also from product development and access to each other’s dealerships and service networks.
