• Sweden's news in English

Volvo in billion-dollar Nissan buyout

AFP · 20 Feb 2007, 09:30

Published: 20 Feb 2007 09:30 GMT+01:00

Facebook Twitter Google+ reddit

Nissan Motor Co., Japan's second largest automaker, has already cut its capital ties with the truckmaker bearing its name to focus on more profitable, lighter vehicles.

Sweden's Volvo AB, the world's number two truckmaker which has reported healthy profits, said it eyed the Japanese company as it saw Asia as a key source for future growth.

"Nissan Diesel holds a solid position in Japan and the rest of Asia where the Volvo Group foresees substantial growth potential," Volvo Chief Executive Officer Leif Johansson said in a statement.

The deal "offers both parties even greater possibilities to learn and benefit from each other's know-how and resources," he said.

Volvo now owns a 19 percent stake in Nissan Diesel Motor Co. Ltd. and an additional 27.5 percent in preference shares.

Nissan Diesel, which has nearly a quarter of the Japanese truck market, said its board of directors accepted Volvo's offer to buy the remaining shares for 7.5 billion Swedish kronor.

"We concluded that this will enable the company to provide greater satisfaction and growth opportunity to the stakeholders," a Nissan Diesel statement said.

It cited in particular the need to invest in development amid stricter environmental regulations around the world.

"We consider that a united management scheme with Volvo Group will be more efficient" to help the company "survive and keep growing in the face of business competition addressing tighter global environmental regulations."

Volvo had proposed a 22-day tender offer starting on Wednesday with an offered price of 540 yen ($4.52) per Nissan Diesel share until the company becomes a 100 percent subsidiary.

Nissan Diesel said the offer was a "reasonable price" as it represented a 32 percent premium on the company's average price on the Tokyo Stock Exchange over the past three months.

The Tokyo Stock Exchange moved the company's shares to its supervision post in the wake of the announcement. The bourse will delist the issue when Nissan Diesel comes entirely under control of Volvo.

Nissan Diesel shares ended the morning session at a bid-only limit of 523 yen, up from Monday's close of 443 yen.

Nissan Motor Co. has cut its capital ties with Nissan Diesel to focus on its core businesses of passenger cars and light commercial vehicles.

Story continues below…

But Volvo has concentrated on trucks and stopped making cars entirely in 1998. In 2001, the Swedish company took over Renault Trucks, the heavy division of French group Renault which owns 44.4 percent of Nissan.

The same year Volvo also took over US-based Mack Trucks.

Volvo said earlier this month that its net profits soared by 24.5 percent in 2006, although its sales dropped in Asia.

Nissan Diesel has a 24 percent share of the Japanese heavy vehicle market, selling some 42,000 trucks and buses in 2005, according to the company. It has 8,900 employees.

In September, Nissan Motor had said it would let Volvo have the six percent of Nissan Diesel that it still held. Nissan Motor had already sold Volvo 13 percent of Nissan Diesel last March.

Facebook Twitter Google+ reddit

Today's headlines
Sweden to keep record-low interest rate in 2017
Sweden's landmark negative interest rate will continue towards 2018. Photo: Anders Wiklund/TT

The Swedish central bank said that it will take longer than expected to reach its inflation target.

Presented by Stockholm University
9 unexpected study programmes at Stockholm University
Photo: Niklas Björling

Did you know Stockholm University offers 75 master's programmes taught in English? And some of them are programmes you won't find anywhere else...

Creepy clown messes with the wrong dog walker in Sweden
Not the clown in the story. Photo: Pontus Lundahl/TT

A dog helped its owner fight off a creepy clown chasing the pair in southern Sweden.

A million Swedes are digitally excluded: report
How should Sweden bridge the digital divide? Photo: Henrik Montgomery/TT

Tech-savvy Swedes? Perhaps not. A new study suggests that at least a million of its residents feel the pain of the digital divide.

Malmö's 19th Swedish title sets Champions hopes alight
Malmö fans celebrating after the match. Photo: Björn Lindgren/TT

Malmö FF have their eyes set on the Champions League after winning the Swedish league for the 19th time.

What's on in Sweden
Five great autumn events in Sweden this week
Jazz in northern Sweden. Photo: Umeå Jazz Festival

Food, music, movies and more food. What better way of helping yourself forget that the days are getting shorter and colder?

Here's how slow Sweden's high-speed trains are getting
A Swedish SJX2000 high speed train. Photo: Tomas Oneborg/SvD/TT

The high-speed rail journey between the three biggest Swedish cities is about to get longer.

The Local List
12 Swedish words with just awesome literal translations
A filthy-minded lobster, i.e. a snuskhummer. Photo: Gorm Kallestad/NTB scanpix/TT

One of our favourite things about the Swedish language is its wonderful compound words, which range from being utterly bizarre to making perfect sense.

US election
Donald Trump won't get new Ericsson head's vote
Trump pictured at a campaign rally in Florida. Photo: Evan Vucci/AP

The new Swedish-American boss of telecoms giant Ericsson has revealed he will not vote for the Republican nominee in the forthcoming US presidential election.

Swedes named fourth most gender equal in the world
A file photo of men and women pushing prams in Stockholm. Photo: Claudio Bresciani/TT

Sweden has closed 81 percent of its overall gender gap according to the World Economic Forum.

Sponsored Article
Stockholm: creating solutions to global challenges
People-watching: October 26th
Sponsored Article
Last chance to vote absentee in the US elections
Sweden cuts 2016 refugee forecast
Is Game of Thrones coming to Sweden?
Blog updates

6 October

10 useful hjälpverb (The Swedish Teacher) »

"Hej! I think the so-called “hjalpverb” (auxiliary verbs in English) are a good way to get…" READ »


8 July

Editor’s blog, July 8th (The Local Sweden) »

"Hej readers, It has, as always, been a bizarre, serious and hilarious week in Sweden. You…" READ »

Sponsored Article
This is Malmö: Football capital of Sweden
Property of the week: Kungsholmen, Stockholm
Sponsored Article
Where is the Swedish music industry heading?
Will Swedes soon be looking for fairtrade porn?
The Local Voices
'I simply don’t believe in nationality'
Why we're convinced Game of Thrones is based on Sweden
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
People-watching: October 21st-23rd
Sponsored Article
Swedish for programmers: 'It changed my life'
Fury at plans that 'threaten the IB's survival' in Sweden
Analysis & Opinion
Are we just going to let half the country die?
Sponsored Article
Top 7 tips to help you learn Swedish
Angry elk chases Swede up a lamp post
Sponsored Article
‘Extremism can't be defeated on the battlefield alone’
The Local Voices
'Alienation in Sweden feels better: I find myself a stranger among scores of aliens'
People-watching: October 20th
Sponsored Article
Stockholm: creating solutions to global challenges
The Local Voices
A layover at Qatar airport brought this Swedish-Kenyan couple together - now they're heading for marriage
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
Swede punches clown that scared his grandmother
Sponsored Article
Where is the Swedish music industry heading?
Fans throw flares and enter pitch in Swedish football riot
Sponsored Article
One expat's strategy for making friends in Stockholm
Could Swedish blood test solve 'Making a Murderer'?
Sponsored Article
Nordic fashion in focus at Stockholm University
Swedish school to build gender neutral changing room
People-watching: October 14th-16th
Man in Sweden assaulted by clowns with broken bottle
Nobel Prize 2016: Literature
Watch the man who discovered Bob Dylan react to his Nobel Prize win
Record numbers emigrating from Sweden
People-watching: October 12th
The Local Voices
'Swedish startups should embrace newcomers' talents - there's nothing to fear'
How far right are the Sweden Democrats?
The Local Voices
Syria's White Helmets: The Nobel Peace Prize would have meant a lot, but pulling a child from rubble is the greatest reward
jobs available