Volvo Bids $1B For Nissan Diesel

AB Volvo, the Swedish truck manufacturer, bids $1.07 billion Tuesday to acquire Japan's Nissan Diesel to establish a solid presence in Asia. The said attempt would vest Volvo a full ownership of Nissan Diesel from the recent 19 percent to realize Volvo's ambitions in Asia, where the automaker is lacking a local brand.Volvo said it estimates Nissan Diesel's net interest-bearing debt at $1.07 billion, bringing the total cost of its planned acquisition of the Japanese truck maker to 15 billion kronor, or $2.14 billion. Iwao Nakamura, president of Nissan Diesel Motor Co. said the move will save costs in development and purchasing, including emission-reducing technologies, and present opportunities for efficient investments for long-term growth. "What we want the most is growth," he told reporters at a Tokyo hotel. "This move is the most effective way to achieve growth." Volvo has Mack Trucks in the United States and Renault Trucks in Europe hence; short of support in Asia.
They said it would help Volvo gain a foothold in Asia. "By doing it now, the company can also avoid the risk of sharing strategic clean-engine technology with a possible competitor," said Danske Bank analyst Henrik Breum. . According to Nissan Diesel, its shared rose 18 percent in Tokyo to a bid-only 523 yen ($4.37), up from its Monday's close at 443 yen ($3.71). Consequently, Volvo shares were up 2 percent at 560 kronor ($79.70) in early trading after finished up 0.18 percent at 549 kronor ($59.40) in Stockholm a day earlier when news of the bid first broke. He said 100 percent ownership will help quicken decision-making, likely to prove critical in keeping abreast of upcoming more stringent emission requirements around the world. Volvo added if approved by antitrust authorities, the deal would be completed by March 29.

"During our joint synergy study, great trust grew between the companies and I believe that the merger is the best alternative for Nissan Diesel's future," Nakamura concluded.

"You need to act now to be ready," he said. "It is too dangerous to provide such research and development in shared efforts."