|Advertising|Jobs 転職|Shukan ST|JT Weekly|Book Club|JT Women|Study in Japan|Times Coupon|Subscribe 新聞購読申込|
|Home > News|
|Home > News|
Tuesday, Sept. 26, 2006
Nissan to sell off stake in truck maker to Volvo
AB Volvo said Monday it will acquire 34.5 billion yen of Nissan Diesel Motor Co.'s preferred stock and purchase 6 percent of Nissan Diesel's outstanding shares from Nissan Motor Co. -- a move that will push Volvo's stake in the truck manufacturer closer to 50 percent by April 2014.
Volvo decided to purchase 34.5 billion yen worth of the preferred shares from three banks and Nissan. They will be converted to a total of 165.1 million shares in installments between 2008 and 2014.
Volvo also exercised its option to purchase 6 percent of Nissan's shares in Nissan Diesel, which will increase Volvo's shares to 19 percent. In March, Volvo acquired 13 percent of the shares in Nissan Diesel from Nissan.
The deal dissolves Nissan's capital ties with Nissan Diesel. But the two companies said they will retain business ties, including joint development of cars and engines.
With the moves, Volvo will own about 42.7 percent of outstanding shares of Nissan Diesel in April 2008 and the figure will increase to 47.4 percent in April 2014.
"The underlining drive for that is the economic scale for research and development, and manufacturing. It is the ability to cover the global market," said Volvo CEO Leif Johansson in a telephone conference in Tokyo.
Johansson also said the move will exclude the opportunity for Volvo to take on an alliance with other companies, adding it will send a message that the two companies "have a clear lineup."
Nissan Diesel President Iwao Nakamura, who attended the news conference, welcomed the move, saying the alliance will give the company a firm financial foothold in the long term.
Since Volvo's acquirement of Nissan Diesel's shares in March, the two companies have been discussing further measures to expand their cooperation in the field of products, research and development, manufacturing, distribution and purchasing.
The two companies refused to disclose how the closer alliance will affect their businesses financially, saying they plan to do so after they complete their discussions on the potential synergy.
Although Nissan Diesel will become a group company of Volvo's, the two companies have agreed that Nissan Diesel will retain its brand name and management team.
Carlos Ghosn, head of Nissan Motor Co. and Renault SA, will hold talks with General Motors Corp. Chairman and Chief Executive Officer Richard Wagoner soon, a source familiar with the negotiations on a possible three-way alliance, sources said Monday.
"They will have talks this week" in Paris, the source said, but declined to comment on whether the meeting will be held before the opening of the Paris Motor Show, which starts Thursday with a media preview.
The remarks came after more than two months of exploratory discussions by the three automakers on the alliance, which could drastically change the landscape of the global auto industry.
The three companies are to decide by Oct. 15 whether to go ahead with or drop the idea of forming a partnership by looking into results of studies conducted by their experts in about 10 business fields, including parts procurement and consignment of production activities.
Nissan executives said earlier there may be a possibility of further examining potential merits of the alliance after Oct. 15, if the automakers agree to work toward a deal.
Nissan and Renault, which formed an alliance in March 1999, are reportedly looking for a comprehensive alliance, while GM is said to be reluctant to have capital ties with them.