Volvo buys American road-builder
AFP · 27 Feb 2007, 16:04
Published: 27 Feb 2007 16:04 GMT+01:00
"Volvo has reached an agreement with Ingersoll Rand to acquire the assets of the company's road development division," Volvo said in a statement.
Ingersoll Rand is a manufacturer of heavy equipment for road construction and soil compaction with revenues of $864 million, Volvo said in a statement.
Volvo, which sold its Volvo Cars division to Ford in 1999, is a world leader in heavy truck manufacturing. The group also has a large division for construction equipment.
The acquisition "gives Volvo Construction Equipment a world-leading position within heavy road construction equipment," Volvo chief executive Leif Johansson said.
The deal will enable Volvo to offer a full-range of heavy road construction equipment, Volvo Construction Equipment president Tony Helsham said.
Geographically, the purchase "provides attractive growth possibilities by capitalizing on the common dealer network in North America, Europe and Asia", he said.
Synergies at the operating income level are expected to reach 600 million kronor ($85.6 million) annually to be achieved within five years.
Ingersoll Rand's division for road development is based in Shippenburg, Pennsylvania and has 2,100 employees.
The Volvo share price was down by 1.73 percent at 567 kronor on the Stockholm stock exchange in morning trading after the announcement, in a market down by about 2.05 percent.