Nissan Diesel accepts Volvo buyout

TOKYO – Japanese truck maker Nissan Diesel yesterday accepted a billion-dollar buyout from largest shareholder Volvo, bracing for growing competition in heavy vehicles as global environmental rules tighten.

Nissan Motor Co., Japan’s second largest automaker, has already cut its capital ties with the truckmaker bearing its name to focus on more profitable, lighter vehicles. Sweden’s Volvo AB, the world’s number two truckmaker which has reported healthy profits, said it eyed the Japanese company as it saw Asia as a key source for future growth.”Nissan Diesel holds a solid position in Japan and the rest of Asia where the Volvo Group foresees substantial growth potential,” Volvo Chief Executive Officer Leif Johansson said in a statement.The deal “offers both parties even greater possibilities to learn and benefit from each other’s know-how and resources,” he said.Volvo now owns a 19 per cent stake in Nissan Diesel Motor Co.Ltd.and an additional 27,5 per cent in preference shares.Nissan Diesel, which has nearly a quarter of the Japanese truck market, said its board of directors accepted Volvo’s offer to buy the remaining shares for 7,5 billion Swedish kronor (US$1 billion).”We concluded that this will enable the company to provide greater satisfaction and growth opportunity to the stakeholders,” a Nissan Diesel statement said.It cited in particular the need to invest in development amid stricter environmental regulations around the world.”We consider that a united management scheme with Volvo Group will be more efficient” to help the company “survive and keep growing in the face of business competition addressing tighter global environmental regulations.”Volvo had proposed a 22-day tender offer starting today with an offered price of 540 yen (US$4,52) per Nissan Diesel share until the company becomes a 100 per cent subsidiary.Nissan Diesel said the offer was a “reasonable price” as it represented a 32 per cent premium on the company’s average price on the Tokyo Stock Exchange over the past three months.The Tokyo Stock Exchange moved the company’s shares to its supervision post in the wake of the announcement.The bourse will delist the issue when Nissan Diesel comes entirely under control of Volvo.Nissan Diesel shares ended the morning session at a bid-only limit of 523 yen, up from Monday’s close of 443 yen.Nissan Motor Co.has cut its capital ties with Nissan Diesel to focus on its core businesses of passenger cars and light commercial vehicles.In 2001, the Swedish company took over Renault Trucks, the heavy division of French group Renault which owns 44,4 per cent of Nissan.The same year Volvo also took over US-based Mack Trucks.Volvo said earlier this month that its net profits soared by 24,5 per cent in 2006, although its sales dropped in Asia.Nampa-AFPSweden’s Volvo AB, the world’s number two truckmaker which has reported healthy profits, said it eyed the Japanese company as it saw Asia as a key source for future growth.”Nissan Diesel holds a solid position in Japan and the rest of Asia where the Volvo Group foresees substantial growth potential,” Volvo Chief Executive Officer Leif Johansson said in a statement.The deal “offers both parties even greater possibilities to learn and benefit from each other’s know-how and resources,” he said.Volvo now owns a 19 per cent stake in Nissan Diesel Motor Co.Ltd.and an additional 27,5 per cent in preference shares.Nissan Diesel, which has nearly a quarter of the Japanese truck market, said its board of directors accepted Volvo’s offer to buy the remaining shares for 7,5 billion Swedish kronor (US$1 billion).”We concluded that this will enable the company to provide greater satisfaction and growth opportunity to the stakeholders,” a Nissan Diesel statement said.It cited in particular the need to invest in development amid stricter environmental regulations around the world.”We consider that a united management scheme with Volvo Group will be more efficient” to help the company “survive and keep growing in the face of business competition addressing tighter global environmental regulations.”Volvo had proposed a 22-day tender offer starting today with an offered price of 540 yen (US$4,52) per Nissan Diesel share until the company becomes a 100 per cent subsidiary.Nissan Diesel said the offer was a “reasonable price” as it represented a 32 per cent premium on the company’s average price on the Tokyo Stock Exchange over the past three months.The Tokyo Stock Exchange moved the company’s shares to its supervision post in the wake of the announcement.The bourse will delist the issue when Nissan Diesel comes entirely under control of Volvo.Nissan Diesel shares ended the morning session at a bid-only limit of 523 yen, up from Monday’s close of 443 yen.Nissan Motor Co.has cut its capital ties with Nissan Diesel to focus on its core businesses of passenger cars and light commercial vehicles.In 2001, the Swedish company took over Renault Trucks, the heavy division of French group Renault which owns 44,4 per cent of Nissan.The same year Volvo also took over US-based Mack Trucks.Volvo said earlier this month that its net profits soared by 24,5 per cent in 2006, although its sales dropped in Asia.Nampa-AFP