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Volvo Makes $1.1B Bid for Nissan Diesel

AB Volvo has made a SEK 7.5-billion (US$1.1-billion) public offer to acquire the Japanese truck manufacturer Nissan Diesel. Volvo already owns a 19% holding in Nissan Diesel and preference shares which can be converted to an additional 27.5%, after full dilution.

Volvo’s offer for Nissan Diesel represents a premium of 32% based on the average prices during the past three months. The offer is open through 23 March and is not conditional upon a lowest level of acceptance, but is dependent on the necessary approvals from the anti-trust authorities.

Nissan Diesel can benefit from the Volvo Group’s resources and know-how, but Volvo can also benefit greatly from Nissan Diesel’s experience of medium-heavy trucks and its expertise in, for example, hybrid technology.

—Jorma Halonen, Volvo Deputy CEO and Vice Chairman, Nissan Diesel’s Board

In November, Nissan Diesel and AB Volvo agreed to jointly develop medium-duty trucks for worldwide sales. The companies also conducted a joint study on advanced technologies such as hybrid engines, alternative fuels and emissions treatments.

In addition to their work on hybrid drivetrains, both companies have developed compression-ignition engine trucks fueled by dimethyl ether (DME). Each also has well-developed SCR systems for emissions reduction. (Earlier post.)

A study of broader coordination possibilities carried out jointly by Volvo and Nissan Diesel identified synergies over five years of about €200 million (US$263 million) annually. The major portion of the integration gains is as a result of increased purchasing volumes, but positive effects also arise within product development, engines and drivelines. Other gains arise in that the companies have access to each other’s dealer and service networks, primarily in Asia but also in other parts of the world.



BTW, AB Volvo is not related with Volvo cars, which is owned by Ford.


Another attempt to build American-European-Japanese automotive empire (Volvo Trucks already bought US Mack Trucks). Attempt of Mercedes to build Daimler-Chrysler-Mitsubishi failed: Mitsubishi is off for a year, and Chrysler is up to a sale right now. GM some times ago sold out their interests in Isuzu and Subaru (Subaru was mainly picked up by Toyota).

However, some international automotive conglomerates are quite solid. Ford-Jaguar-Ford Europe-Volvo Cars-Mazda, GM-Opel-Saab-Daiwoo-Kia-Suzuki, Renault-Nissan, for example.

Rafael Seidl

Andrey -

there is a huge difference between M&A in the passenger car/truck sector, where emotional factors such national and cultural sensibilities loom very large and the HDV sector, where TCO is all that really matters. I'm not sure comparing the two so directly makes sense.

Cheryl Ho

There are developments in DME in China today:
China is already most advanced in commercial use of DME as a mixture with LPG. China is mainly interested in DME production from their own coal resources as national policy. South Korea is also interested in DME. As KOGAS is predominant in handling gas in South Korea , MOU for market study in South Korea has been signed between TOTAL and KOGAS quite recently. Their interest of DME is for LPG market as well as fuel for diesel trucks.

If you would like to know more on the latest DME developments, join us at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:

DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
National Development Reform Commission NDRC
Ministry of Energy for Mongolia

Production of DME/ Methanol through biomass
gasification could potentially be commercialized
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.

Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe

Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation

For more information: www.iceorganiser.com

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