Volvo 1999 Annual Report Download - page 63

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Euclid Hitachi Heavy Equipment Inc.
In October 1998, Volvo Construction Equipment conclud-
ed an agreement with Hitachi Construction Machinery
Ltd. to reduce Volvo’s holding in Euclid Hitachi Heavy
Equipment, a jointly owned company, from 60% to 20%.
The sale of shares had only a marginal impact on report-
ed earnings of the Volvo Group for 1998.
Kopsch AG
In September 1998, Volvo Construction Equipment
acquired its largest dealer in Germany, Kopsch AG, with
ten dealerships.
Volvo Otomotiv Türk Ltd Sti (Trakmas)
In September 1998, Volvo Construction Equipment took
over its import operations in Turkey, including four sales
locations, from Trakmas. Volvo’s operations in the Turkish
market were then coordinated with those of Volvo
Otomotiv Türk, a wholly owned subsidiary.
Volvo Construction Equipment Korea Co Ltd
In July 1998, Volvo Construction Equipment acquired all
of the assets of Samsung Heavy Industries’ construction
equipment business for slightly less than 500 M USD.
The assets were acquired mainly through a newly formed
subsidiary, Volvo Construction Equipment Korea. The
acquired business includes the development, production
and marketing of excavators, as well as wheel loaders
and other equipment on a smaller scale. The acquisition
also includes a comprehensive distribution network in
the South Korean market. Goodwill amounting to SEK
1.2 billion, which is being amortized over 20 years, arose
in connection with the acquisition.
ZAO Volvo Vostok
In June 1998, a company was established in Russia,
ZAO Volvo Vostok, in which each of the business areas
conducts its business.
Nova BUS Corporation
In February 1998, Volvo Bus Corporation acquired Nova
BUS, a North American bus manufacturer, for slightly
more than CAD 50 million. The acquisition was effected
via Prévost Car Inc., in which Volvo Bus Corporation has
held a 51% interest, and British Henlys Group 49%, sin-
ce 1995. Nova BUS is the largest producer of city buses
in the United States and Canada, with production plants
in both countries. Goodwill amounting to SEK 0.3 billion,
which is being amortized over 20 years, arose in connec-
tion with the acquisition.
BRS Truck Rental and Contract Hire Ltd
In February 1998, Volvo Contract Services, Volvo’s sales
financing company in Great Britain, acquired BRS, a
British truck leasing company, for approximately GBP
49 million. BRS is a well-established brand name in the
field of British truck leasing, with representation through-
out Great Britain and in other parts of Europe.
Carrus Oy
In January 1998, Volvo Bus Corporation acquired all the
shares of Carrus Oy, a Finnish producer of bus bodies,
for SEK 0.5 billion. The company manufactures five dif-
ferent body models for city, intercity and tourist buses
used on bus chassis of various vehicle producers.
Goodwill amounting to SEK 0.2 billion, which is being
amortized over 10 years, arose in connection with the
acquisition.
Volvo Trucks North America, Inc.
(formerly Volvo GM Heavy Truck Corporation)
In July 1997, Volvo Truck Corporation took over the re-
maining 13% of the common shares of its North American
truck company from General Motors Corporation and
changed the name of the company to Volvo Trucks North
America, Inc. The reason for the change was to gain full
control of the company. General Motors received redeem-
able preferred shares in exchange for its common shares.
Banco Volvo Brasil SA
In December 1997, Volvo do Brasil acquired the remain-
ing outstanding 50% of the shares of the Brazilian sales-
financing company, Transbanco Banco de Investimento
SA. As of December 31, 1997, the company’s balance
sheet was consolidated in the Volvo Group accounts.
The holding was reported earlier in accordance with the
equity method. During 1999, the company’s name was
changed to Banco Volvo Brasil SA.
Champion Road Machinery Limited
In March 1997, Volvo Construction Equipment acquired
all of the shares of the Canadian company, Champion
Road Machinery Limited, for CAD 173 million. The com-
pany is a large manufacturer of graders and other machi-
nes used in road construction and maintenance. Champion
was consolidated as of January 1, 1997. Goodwill
amounting to SEK 0.7 billion, which is being amortized
over 20 years, arose in connection with the acquisition.
Volvo Penta Benelux BV
During 1997, AB Volvo Penta acquired Nebim Handels-
maatschappij, an independent importer in the Netherlands.
The name of the company was then changed to Volvo
Penta Benelux BV. The company is responsible for the
marketing, sales and service of industrial and marine
engines in Belgium, the Netherlands and Luxembourg.
The AGES Group
In 1997, Volvo Aero increased its ownership in The
AGES Group from 25% to 60% and thereafter the com-
pany was consolidated as a subsidiary of Volvo. AGES,
headquartered in Florida, trades in used aircraft material,
mainly aircraft engines and spare parts for engines and
aircraft. In 1998 BTM Capital, a wholly owned subsidiary
of Bank of Tokyo-Mitsubishi Ltd, acquired an interest in
AGES, reducing Volvo’s ownership to 57%. During 1999,
Volvo Aero increased its ownership interest in AGES to
86.4% and consequently took over operating responsib-
ility for the company. Goodwill amounting to SEK 0.3 bil-
lion, that is being amortized over 20 years, arose in con-
nection with the acquisitions.