Japanese truck maker Nissan Diesel on Tuesday accepted a $1-billion buyout from largest shareholder Volvo, bracing for growing costs as global rules tighten on gas emissions.
Nissan, Japan’s second largest automaker, has already cut its capital ties with the truck maker bearing its name to focus on more profitable, lighter vehicles.
Sweden’s Volvo AB, the world’s number two truck maker which has reported healthy profits, said it eyed the Japanese company as it saw Asia as a key source for future growth.
“In this case the two partners can help each other greatly with the very good position of Nissan Diesel in Asia and the very good position of the Volvo group worldwide,” Volvo chief executive officer Leif Johansson told a news conference in Tokyo via satellite.
Volvo now owns a 19% stake in Nissan Diesel and an additional 27,5% in preference shares.
Nissan Diesel, which has nearly a quarter of the Japanese truck market, said its board of directors accepted Volvo’s offer to buy remaining shares in the company valued at a total of 7,5-billion Swedish kronor ($1-billion).
“After studying the synergies, we found there were lots of opportunities and potential,” said Iwao Nakamura, president and chief executive officer of Nissan Diesel.
“Becoming a 100% subsidiary is the best way for our primary goal of growth,” he said.
Nissan Diesel said the deal would allow greater investment in development to meet regulations on greenhouse gas emissions, which will tighten across the United States, Japan and Europe by 2010.
Volvo’s Johansson said the two companies had already discussed cooperating to meet stricter emissions standards. – AFP