Volvo to acquire 13% of Nissan Diesel

Volvo AB is currently the Europe’s largest manufacturer of trucks and the company has just announced their decision to buy 13 percent of Japan based Nissan Diesel Motor Co. This division of Nissan is the smallest maker of commercial vehicles from Nissan Motor Co. and Volvo expects this to help them increase sales in Japan, China, and Southeast Asia.

Volvo would be paying around $195 million in cash for 40 million shares of Nissan Diesel Motor and as a result would become the biggest investor in the company. They also get a four-year option to buy Tokyo-based Nissan’s remaining 6 percent stake in the truck maker.

Asian market is growing fast for such commercial vehicles and Volvo aims to capture a significant part of this market. this alliance would enable Nissan, Volvo and Nissan Diesel cooperate with china based Dongfeng Motor to challenge the domination of DaimlerChrysler AG which would begin manufacturing trucks in china this year.

This news event will not result in any change in the Nissan Diesel’s top management and its brand name. Volvo would be appointing Deputy Chief Executive Officer Jorma Halonen to Nissan Diesel’s board.

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