Volvo 2000 Annual Report Download - page 59

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Volvo Aero Norge AS (formerly Norsk Jetmotor AS)
During 1999, Volvo Aero acquired 78% of the shares in
Norsk Jetmotor AS in two stages for NOK 240 M. In
conjunction with the acquisition, the name of the com-
pany, which is mainly involved in production of com-
mercial aircraft components, was changed to Volvo Aero
Norge AS. Goodwill of SEK 0.1 billion that arose in con-
junction with the acquisition is being amortized over 20
years.
Volvo Malaysia Sdn Bhd
In the beginning of 1999, Federal Auto Industrial Sdn Bhd
was acquired. The company, whose name was changed
later in the year to Volvo Malaysia Sdn Bhd, conducts
importer and dealer operations in Malaysia for trucks and
buses as well as marine and industrial engines.
Volvo Cars
In January 1999, AB Volvo reached an agreement with
Ford Motor Company covering the sale of Volvo Cars.
Following approval by a General Meeting of Volvo share-
holders on March 8, and by the relevant competition
authorities, AB Volvo completed the sale of Volvo Cars to
Ford Motor Company on March 31, 1999. Under terms
of the agreement, Ford has the right to Volvo Cars’ earn-
ings beginning on January 1, 1999. In addition to a divi-
dend of SEK 17.7 billion from Volvo Personvagnar
Holding AB, AB Volvo received SEK 10.3 billion for the
shares, plus USD 2.3 billion, of which USD 1.6 billion will
be paid on March 31, 2001. In connection with the sale,
Ford assumed financial net debt of SEK 4.8 billion. The
gain from the sale amounted to SEK 26.7 billion. In con-
junction with the sale of Volvo Cars, the Volvo trademark
was transferred to a newly formed company named
Volvo Trademark Holding AB which is owned jointly by
AB Volvo and Volvo Car Corporation. The right to use the
trademark is thereby governed by a license agreement
between Volvo Trademark Holding AB and AB Volvo as
well as Volvo Car Corporation.
Mexicana de Autobuses SA de CV
In October 1998, AB Volvo acquired all of the shares
of Mexicana de Autobuses (MASA). MASA is Mexico’s
second-largest producer of tourist and intercity buses.
Goodwill amounting to SEK 0.6 billion, which is being
amortized over 20 years, arose in connection with the
acquisition.
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. The remaining
20% of Euclid Hitachi Heavy Equipment was sold to
Hitachi on December 20, 2000 for a nominal amount.
Kopsch AG
In September 1998, Volvo Construction Equipment
acquired its largest dealer in Germany, Kopsch AG, with
ten branches.
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 USD 500 M.
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%,
since 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
connection 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.