Volvo 1998 Annual Report Download - page 66

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64
NOTE S
Acquisitions and divestments
Pharmacia & Upjohn, Inc
In 1996 Volvo sold 50,006,534 Pharmacia & Upjohn, Inc
shares. The capital gain amounted to SEK 7.8 billion and
Volvo’s holding in the company thereafter amounted to
3.9% of the share capital and voting rights. In 1998 Volvo
sold its remaining holding. The amount received was SEK
6.5 billion and the capital gain amounted to SEK 4.5 billion.
Verimation
In 1998 Volvo Aero’s subsidiary, AGES, and BTM Capital’s
subsidiary, Engine Lease Finance, ELF, formed a new
company to lease aircraft engines. ELF owns 46% of the
new company, and AGES 44%, while BTM Capital and
Volvo Aero each own 5%. In addition, BTM Capital ac-
quired a 5% interest in AGES and Volvo Aero acquired
a 5% interest in ELF.
Aviation Lease Finance, ALF
In 1998 Volvo Aero’s subsidiary, AGES, and BTM Capital’s
subsidiary, Engine Lease Finance, ELF, formed a new
company to lease aircraft engines. ELF owns 46% of the
new company, and AGES 44%, while BTM Capital and
Volvo Aero each own 5%. In addition, BTM Capital acqui-
red a 5% interest in AGES and Volvo Aero acquired a
5% interest in ELF.
Henlys Group Plc
In August 1998 Volvo acquired 10% of the share capital
and voting rights in Henlys Group Plc. Henlys owns the
leading manufacturers of bus bodies in Great Britain. Volvo
and Henlys jointly own the shares of Prévost, which manu-
factures buses in Canada, with 51% and 49%, respectively.
Deutz AG
In October 1998 Volvo and Deutz AG, a German manu-
facturer of diesel engines, concluded an agreement
covering cooperation in the field of diesel engines. Under
terms of the agreement Deutz will become a principal
supplier of small and medium-size diesel engines for
Volvo’s trucks, buses, construction equipment and marine
and industrial applications. In connection with the agree-
ment Volvo has acquired 10.5% of the share capital and
voting rights in Deutz.
ABB Olofström Automation AB
The entire shareholding, amounting to 49% of the share
capital and voting rights, was divested in 1998.
EBP Olofström AB
The entire shareholding, amounting to 23% of the share
capital and voting rights, was divested in 1998.
Arabian Vehicles and Trucks Industry Ltd
In 1998 Volvo acquired 25% of the voting rights and
share capital in Arabian Vehicles and Trucks in Saudi
Arabia. The company will assemble Volvo trucks and the
business will start in the second half of 1999.
The AGES Group, ALP
During 1996 Volvo Aero increased its holding in The
AGES Group, ALP (Air Ground Equipment Sales), an
American company, from 5% to 25%. In the beginning of
1997 the holding was increased to 60% and since then
AGES has been a Volvo subsidiary (see Note 2).
OmniNova Technology AB
In March 1997 Volvo Bus Corporation and TWR Group
Ltd., an English engineering company, formed a jointly
owned company to develop production processes for
buses, and to produce certain bus components. Volvo
Bus Corporation owns 35% of the company and TWR
65%; the company’s operations are located with those of
Autonova in Uddevalla.
Régie Nationale des Usines Renault SA
(Renault SA)
In July 1997 Volvo divested its entire holding in Renault,
equal to 11.4% of both the share capital and voting
rights in the company. The proceeds amounted to 5,934
and the capital gain was 783.
Pripps Ringnes AB
At year-end 1996 Volvo owned 49% of the shares and
held a convertible debenture loan that would increase
the holding to 55%. In 1997 Volvo sold its holding in
Pripps Ringnes. Volvo received 4,515 from the sale plus
100 in dividends, and the transaction resulted in a capi-
tal gain of 3,027 in the Volvo Group.
SAS Sverige AB
In June 1997 Volvo sold its entire holding in SAS
Sverige AB, equal to 4.7% of the share capital and
voting rights. The amount of the sale was 319 and the
capital gain was 221.
Fabege AB
In 1997 Volvo divested its entire holding in Fabege AB,
equal to 8.3% of the share capital and 7.5% of the
voting rights. The capital gain was 19.
Merkavim Metal Works Ltd
In January 1996 Volvo Bus Corporation acquired 26.5%
of the share capital and voting rights in Merkavim Metal
Works Ltd, Israel. The company produces coaches, city
and inter-city buses, as well as articulated buses and
minibuses.
Investment AB Bure
In 1996 Volvo sold its entire holding, 17.7%, resulting in
a gain of 394.
Spira AB
The entire holding, 9.5%, was sold in 1996, producing
a capital gain of 10.
A specification of Group holdings of shares and partici-
pations appears on page 88. Call options with a total
exercise price of – (–; 5) have been issued on shares
with book values of – (–; 2).
The Volvo Group has transactions with some of its
associated companies. As of December 31, 1998, the
Group’s net receivables from associated companies
amounted to 6,260 (4,575; 6,909).
The market value of Volvo’s holdings of securities in
listed companies as of December 31, 1998 is shown
below.
Book value Market value
Bilia AB 572 644
Henlys Group 376 302
Deutz AG 670 485
Total 1,618 1,431
Shares and participations Note 13