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.