Volvo Group and Isuzu Motors Complete UD Trucks Transaction
The Volvo Group and Isuzu Motors have completed the transaction whereby Isuzu Motors acquired UD Trucks from the Volvo Group for an enterprise value of JPY 243 billion (approximately SEK 19 billion) on a cash and debt free basis.
The alliance within commercial vehicles between the two groups, aiming to capture opportunities in the ongoing industry transformation will also become operational. The transaction is estimated to have a positive impact on the Volvo Group’s operating income in the second quarter 2021 of close to SEK 2 billion and increase the Volvo Group’s net cash position by approximately SEK 19 billion.
The alliance between the Volvo Group and Isuzu Motors is set to a build long-term relationship. Alliance work is now entering the next phase to derive potential synergies in areas that will encompass, but are not be limited to:
• Forming a technology partnership, intended to leverage the parties’ complementary areas of expertise within both well-known and new technologies and creating a larger volume base to support investments for world-class technology.
• Creating the best long-term conditions for a stronger heavy-duty truck business for UD Trucks and Isuzu Motors in Japan and across international markets by transferring ownership of the complete UD Trucks business from the Volvo Group to Isuzu Motors.
• Exploring further opportunities for even broader and deeper collaboration within the commercial vehicle businesses across geographical areas and product lines for future urban logistics solutions.
• Exploring cooperation in the areas of purchasing and logistics, leveraging common technology, as well as the geographical footprint complementarity and volume expansion.
The Volvo Group and Isuzu Motors will establish a Joint Alliance Office, with facilities both in Japan and Sweden, which will be overseen by an Alliance Board comprising the Isuzu Motors President, the Volvo Group CEO and other key executives from the two groups.