AB Volvo`s Board of Directors has decided to make a public offer to acquire the Japanese truck manufacturer Nissan Diesel. The offer, which is supported by Nissan Diesel`s Board of Directors, means that Volvo offers $4.5 in cash per share and the total value of Volvo`s offer amounts to $1 billion. Volvo already owns a 19% holding in Nissan Diesel and preference shares which can be converted to an additional 27.5%, after full dilution.
“With Volvo as owner, Nissan Diesel gains the resources and the financial stability needed to fully capitalize on the opportunities that a closer cooperation offers to both parties,” says Volvo CEO Leif Johansson.
Volvo anticipates that payment can be made for acquired shares on or about March 29, 2007. If the offer for Nissan Diesel is implemented, Volvo will have paid a total of $1.9 billion for all shares, corresponding to $3.9 per share.
In March 2006, Volvo acquired 40 million shares in Nissan Diesel, corresponding to 13% of the votes and capital. In September of the same year, Volvo increased its ownership to 58.2 million shares corresponding to 19% of votes and capital. At the same time, Volvo purchased all 57.5 million preference shares in the company that through 2014 would be converted in stages and which in 2014 would provide Volvo with 46.5% of the votes and capital in the company, after full dilution. However, as early as in April 2008, Volvo`s ownership after conversion of preference shares would have increased to 41.9%.
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