Volvo 1999 Annual Report Download - page 25

23
Closer cooperation between Volvo
and Mitsubishi Motors. In December
1999 Volvo and Mitsubishi Motors of Japan
concluded final agreements covering the
formation of a marketing, product and
industrial cooperation. Volvo also acquired
slightly more than 48 million newly issued
shares, corresponding to 5% of the voting
rights and share capital in Mitsubishi Motors,
for the equivalent of SEK 2.3 billion.
The agreements comprise the following
main points:
■Mitsubishi Motors is forming a new truck
and bus company in which Volvo will have a
stake. As an initial step
in the formation of this
company, Mitsubishi
will establish an inter-
nal division for its truck
and bus operations, not
later than April 1,
2000. In a second
stage, this division will be converted into
a separate subsidiary. Volvo has an option
to acquire up to 19.9% of this company not
later than December 31, 2001.
12 13 1514
THIRD QUARTER FOURTH QUARTER
Volvo CE divested marketing
com panies. As part of Volvo CE’s
strategy to organize sales mainly through
independent dealers rather than its own
operations, the marketing company in Spain
was divested during the second quarter. The
sale resulted in a capital gain of SEK 180 M.
Parts of Volvo CE’s sales operations in
France were also sold. Volvo decided to participate in
the financing of Henlys’ ac-
quisition of Bluebird. In September it was
announced that Henlys, the British bus
manufacturer partly (about 10%) owned by
Volvo, was acquiring Bluebird, an American
bus manufacturer, for the equivalent of SEK
3.5 billion. Henlys thereby became the
leading manufacturer of school buses in the
North American market. New shares were
issued in connection with the acquisition and
in November Volvo subscribed for new Henlys
shares in an amount equal to approximately
SEK 149 M. In September Volvo also
concluded an agreement to issue a
convertible debenture loan of approximately
SEK 2 billion to Henlys, which was paid out in
October.
AB Volvo m ade an offer for
Scania. On August 6, AB Volvo
reached an agreement with Investor AB to
acquire all Investor’s shares in Scania AB,
corresponding to 27.8% of the share captial
and 49.3% of the voting rights.
In connection with Volvo’s agreement with
Investor, Volvo’s Board of Directors voted to
make a public offer to the other Scania
shareholders to tender their shares to Volvo.
Volvo’s acquisition of Investor’s holding of
Scania shares and the public offer is subject
to receipt of the required approvals from the
pertinent authorities.
During the third quarter Volvo increased its
holding in Scania to 43.1% of the share
capital, and to 28.5% of the voting rights,
thereafter Volvo acquired additional Scania
14
Volvo Trucks acquired an interest
in Petro Stopping Centers. In July,
in accordance with a letter of intent that
was signed in March,
Volvo Trucks acquired a
28.7% interest in Petro
Stopping Centers, a
North American chain
of truck stops. The joint
venture is designed to
strengthen the avail-
ability of Volvo Trucks’ service and its
presence along highways in the United
States. It increases the company’s ability to
offer maintenance service around the clock,
seven days of the week, at 53 strategic
locations along the highway network in the
U.S. Following a build-up and training period,
customer-oriented operations will begin
during the first half of 2000.
Finnveden takes over production
of components. In December, Volvo
Aero concluded an agreement in principle
whereby Finnveden, an engineering group,
took over Volvo Aero’s Truck Engine Parts
Division (TEPD) in Trollhättan. The Division,
which has annual sales of approximately SEK
300 M, produces components for trucks. The
final agreement was signed on February 11,
2000, with takeover on February 28.
16
16
■Cooperation between Volvo and Mitsubishi
in the truck and bus product areas, in which
the first joint project will involve development
of the next generation of medium-heavy
trucks. This cooperation also pertains to the
exchange of knowledge related to future
technologies, and to cooperation in the area
of components for heavy trucks. In addition,
the companies intend to conduct regional co-
operation in Asia, South America, Australia
and New Zealand. The cooperation also
covers increased sales exposure for
Mitsubishi Canter trucks in Volvo’s dealer
network in Europe, in Germany as one
example. The cooperation was begun in
1999.
shares and at February 14, 2000 held 45.5%
of Scania’s share capital and 30.6% of the
voting rights in the company.
Scania is reported as an associated com-
pany as of and including the second quarter
of 1999, (for further information see note 13,
page 66).
15
13
12
11