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The Volvo Group
98 Volvo Group 2005
Notes to consolidated fi nancial statements
The effects during 2005 and 2004 on the Volvo Group’s balance sheet
and cash fl ow statement in connection with the acquisition of sub-
sidiaries and other business units are specifi ed in the following
table:
2004 2005
Intangible assets (599) 20
Property, plant and equipment 300 124
Assets under operating lease 115 0
Shares and participations (260) (80)
Inventories 630 129
Current receivables 958 257
Cash and cash equivalents 180 42
Other assets 62 3
Minority interests (20) (45)
Provisions (63) (4)
Loans (347) (115)
Liabilities (448) (203)
Acquired net assets 508 128
Cash and cash equivalents paid (508) (60)
Cash and cash equivalents according
to acquisition analysis 180 42
Effect on Group cash and cash equivalents (328) (18)
The effects during 2005 and 2004 includes wholly owned subsidiar-
ies that previously were accounted for according to the equity
method.
The effects during 2005 and 2004 on the Volvo Group’s balance
sheet and cash fl ow statement in connection with the divestment
of subsidiaries and other business units are specifi ed in the
following table:
2004 2005
Property, plant and equipment (440) (519)
Inventories (4) (41)
Other receivables 181 (334)
Cash and cash equivalents – (114)
Provisions 94 (12)
Other liabilities 50 888
Divested net assets (119) (132)
Cash and cash equivalents received 187 782
Cash and cash equivalents,
divested companies – (114)
Effect on Group cash and cash equivalents 187 668
AB Volvo’s holding of shares in subsidiaries as of December 31,
2004 is shown in the table AB Volvo’s holding of shares (pages
141–143). Signifi cant acquisitions, formations and divestments within
the Group are listed below.
Celero Support AB
In November 2005 Volvo sold Celero Support AB to Coor Service
Management for 680 before deduction for the company’s net debt.
The sale resulted in a gain of about 430. Celero Support AB is a
service company with operations that include various offi ce and
workplace sevices as well as maintenance of industrial plants and
properties. Celero Support has 1,100 employees, with sales totaling
about SEK 1.4 billion.
Properties
In February 2005, Volvo Financial Services, via the Volvo Group’s
real estate company, Danafjord AB, entered an agreement on the
sale of two wholly owned companies, which own properties in Tors-
landa and Kalmar valued at about 515. The sale yielded a capital
gain of 188.
L.B. Smith (SABA Holding Inc.)
On May 2, 2003 Volvo Construction Equipment purchased the
assets amounting to USD 189 M associated with the Volvo distribu-
tion business of L.B. Smith Inc. in the US. No goodwill or real estate
was included in the deal. The major part of the dealerships was
divested during 2004.
Renault V.I. and Mack
During the fourth quarter 2004 AB Volvo and Renault signed a set-
tlement agreement regarding the disagreement the companies have
had since 2001 pertaining to Volvo’s acquisition of Renault V.I./Mack
and the value of certain of the acquired assets and certain warranty
claims. The settlement, EUR 108 M has reduced the goodwill
amount pertaining to the acquisition of Renault V.I.
Prévost Car Inc.
During the third quarter 2004 the North American bus manufacturer
Prévost Car Inc. became a wholly owned subsidiary of Volvo Bus
Corporation. As part of the restructuring of the bus manufacturer
Henlys Group Plc, Volvo Group reached an agreement to acquire the
remaining 50% of the shares. Prévost Car Inc. was a former 50/50
joint venture between Volvo and Henlys, reported in the Volvo Group
accounts in accordance with the proportionate consolidation
method. The purchase price was USD 83 M including two loans
made available to Prévost Car Inc. by Henlys. Prévost Car Inc. con-
tain the Prévost and Nova brands. Prévost manufactures coaches
and bus shells for luxury mobile homes. Nova Bus manufactures city
buses mainly for the Canadian market.
Axle manufacturing
During the third quarter 2004 Volvo and ArvinMeritor signed a Stra-
tegic Alliance Agreement for the supply of axels. As a consequence
of the strategic alliance ArvinMeritor acquired the Volvo’s axle plant
and foundry in Lyon, France.
Note 4 Acquisition and divestments of shares in subsidiaries