Volvo projects gains from Nissan deal

Nov. 16, 2006
Sweden-based AB Volvo, the parent company of both Volvo Trucks North America and Mack Trucks Inc., believes its 19% stake in Japanese truck manufacturer Nissan Diesel should result in “synergy gains”

Sweden-based AB Volvo, the parent company of both Volvo Trucks North America and Mack Trucks Inc., believes its 19% stake in Japanese truck manufacturer Nissan Diesel should result in “synergy gains” equal to $256.5 million annually (200 million Euro) within five years. Nissan Diesel will realize over half of that gain while the remainder will be within Volvo Group, AB Volvo said.

“The largest economies of scale, and those that are the easiest to realize, are within purchasing of components, in which Nissan Diesel will primarily benefit from the positive effects of the increased volumes,” said Jorma Halonen, deputy CEO of Volvo and responsible for the Group’s international expansion. “Other areas in which positive synergies will arise are in product development, engines and drivelines, as well as distribution and sales.”

The Volvo Group, the commercial truck arm of AB Volvo, purchased 13% of the votes and capital in Nissan Diesel in March from parent company Nissan Motor, with an option to acquire an additional 6% within four years.

At the end of September, this option was exercised, bringing Volvo’s stake up to 19% with Volvo acquiring 57.5 million preference shares in Nissan Diesel. Once those preference shares are converted in phases starting in 2008, Volvo’s ownership interest in Nissan Diesel will rise to 41.9% and then to 46.5% by 2014, the company said.

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!

Sponsored Recommendations

Take Control of Your Finances: A Practical Guide for Carriers in Trucking

This guide is designed to help you navigate these challenges, featuring strategies for automation, examples of effective tools, and a real-world success story from Phoenix Cargo...

Report: The 2024-2025 State Of Heavy-Duty Repair

Fullbay's fifth annual State of Heavy-Duty Repair compiles insights from almost 1,000 experts and over 3,500 shops. If you aren't leveraging these proven data points, your competition...

Guide For Managing Maintenance

The Guide for Managing Maintenance is a comprehensive resource designed to help fleet managers improve their maintenance operations, reduce downtime, and lower overall fleet costs...

The Road Ahead: 2025 Trucking and Fleet Insights

Discover how fleet operators are impacted by challenges like driver onboarding delays and complex compliance, and the critical need for technology to boost efficiency and cut ...