Thursday, June 14, 2012

Truck Maker Ups Shares in Engine Group and Shows the Future of Transport

New Website To Show Off Current Research and Development Whilst Volvo Takes 25% of Deutz
Shipping News Feature

SWEDEN – GERMANY – WORLDWIDE – Volvo has launched a new website to show off its latest concepts and research whilst, assuming the competition authorities approve AB Volvo are about to acquire over 22 million shares in Deutz AG, one of their long time engine parts suppliers. This proposed deal will take Volvo’s share of the company to 25% from the current 6.7% they currently hold. Recently the two groups have been cooperating more closely and a recent memorandum of understanding aims at analyzing the conditions for establishing a joint venture in China for the production of medium-duty engines for off-road applications.

If approved Volvo becomes the largest single shareholder in the Deutz group acquiring the new stock from the Same Deutz-Fahr Group at a price of €5.88 per share. The memorandum of understanding is a non binding agreement with the intention to explore the potential to extend the companies’ long-term cooperation through joint development of the new off-road engines. Olof Persson, Volvo’s CEO said:

“Deutz AG has been an important supplier and partner for many years. The increase in our shareholding in the company is a natural step in light of our plans to expand our commercial cooperation in medium-duty engines.”

Volvo, one of the largest truck manufacturers in the world has scheduled the transaction to be finalized in the third quarter of this year and say it is not expected to have any material impact on the group’s earnings or financial position. At the date of negotiation, the price was set at €5.88 per share, corresponding to the average price for the share for the three months preceding the date at which the price for the shares were agreed, plus a premium of 12%.

In other news Volvo is opening the door to the future with its new Tech World website. For the first time, many of the research projects on which the company’s engineers are working will be openly displayed. In 2011, the Volvo Group invested more than SEK 13 billion in research and development, traditionally the most secretive aspect of a company. This is natural, since it involves launching new solutions ahead of competitors. Nevertheless, the Volvo Group has decided to display some of the company’s work for the future on its new website Tech World.

Tech World features a large number of examples of future projects: automatic equipment, vehicle fuel from forest raw material, vehicles that communicate with each other, electricity generation from surplus engine heat, boat simulators and much more. The Volvo Group’s engineers will share their expertise and will also present some of the challenges that remain to be overcome. Torbjörn Holmström, Chief Technology Officer of the Volvo Group comments:

Times are different and being open about where we are heading is now beneficial for us, our customers and society, w e will have the greatest opportunity to address current challenges and those of the future through cooperation. Tech World clearly demonstrates the challenges and future prospects existing within the Volvo Group. We hope to be able to show that Volvo Group’s engineers are world-leading in many areas and contribute significantly to creating a future in which the environmental impact is reduced and traffic safety is higher.”