Article Categories
» Arts & Entertainment
» Automotive
» Business
» Careers & Jobs
» Education & Reference
» Finance
» Food & Drink
» Health & Fitness
» Home & Family
» Internet & Online Businesses
» Miscellaneous
» Self Improvement
» Shopping
» Society & News
» Sports & Recreation
» Technology
» Travel & Leisure
» Writing & Speaking

  Listed Article

  Category: Articles » Automotive » Cars » Article

Volvo Bids $1B For Nissan Diesel

By Anthony Fontanelle

AB Volvo, the Swedish truck manufacturer, bids $1.07 billion Tuesday to acquire Japan's Nissan Diesel to establish a solid presence in Asia.

The bid was the latest attempt of the automaker to bolster its global presence. The said attempt would vest Volvo a full ownership of Nissan Diesel from the recent 19 percent to realize Volvo's ambitions in Asia, where the automaker is lacking a local brand. Volvo has Mack Trucks in the United States and Renault Trucks in Europe hence; short of support in Asia.

Analysts say that the Volvo Cars division is doing just fine. It has earlier launched fresh vehicles that radiate new design philosophy. They boast of EBC Greenstuff, body parts, advanced amenities and safety features.

AB Volvo is the second largest truck maker around the globe next to Daimler Chrysler AG of Germany. On the other hand, Nissan Diesel is the fourth largest truck maker in Japan. To acquire Nissan Diesel could be the key for the much-awaited dominance in the auto truck market.

Volvo said it estimates Nissan Diesel's net interest-bearing debt at $1.07 billion, bringing the total cost of its planned acquisition of the Japanese truck maker to 15 billion kronor, or $2.14 billion. Iwao Nakamura, president of Nissan Diesel Motor Co. said the move will save costs in development and purchasing, including emission-reducing technologies, and present opportunities for efficient investments for long-term growth. "What we want the most is growth," he told reporters at a Tokyo hotel. "This move is the most effective way to achieve growth."

Chief Executive Leif Johansson said Volvo sped up the takeover plans to prepare for tougher emissions standards being introduced in Japan in 2010. "It's important to do this deal now and not in few years," Johansson told reporters in Stockholm. "We have some very important emission standards coming up and in the short term we can share R&D on that."

Analysts also expressed positive comments regarding the deal. They said it would help Volvo gain a foothold in Asia. "By doing it now, the company can also avoid the risk of sharing strategic clean-engine technology with a possible competitor," said Danske Bank analyst Henrik Breum. "You need to act now to be ready," he said. "It is too dangerous to provide such research and development in shared efforts."

The 540 yen ($4.52) cash per share offer represents the premium of 32 percent. Said amount is based on Nissan Diesel's average share price in the past three months. According to Nissan Diesel, its shared rose 18 percent in Tokyo to a bid-only 523 yen ($4.37), up from its Monday's close at 443 yen ($3.71). Consequently, Volvo shares were up 2 percent at 560 kronor ($79.70) in early trading after finished up 0.18 percent at 549 kronor ($59.40) in Stockholm a day earlier when news of the bid first broke.

Jorma Halonen, Executive Vice President of Volvo Group, said that Nissan Diesel would retain its name and that management will stay Japanese. Volvo is aiming for 20 percent to 25 percent market share in Asia, about the same share the group controls in the U.S. and Europe, Halonen said in Tokyo, without giving a target date.

Nissan Diesel's strengths in Asia, including Thailand and Indonesia, are a good complement for Volvo, Halonen said. He said 100 percent ownership will help quicken decision-making, likely to prove critical in keeping abreast of upcoming more stringent emission requirements around the world. Volvo added if approved by antitrust authorities, the deal would be completed by March 29.

"During our joint synergy study, great trust grew between the companies and I believe that the merger is the best alternative for Nissan Diesel's future," Nakamura concluded.
About the Author
Anthony Fontanelle is a 35-year-old automotive buff who grew up in the Windy City. He does freelance work for an automotive magazine when he is not busy customizing cars in his shop. Visit EBC greenstuff for more info.

Article Source:
If you wish to add the above article to your website or newsletters then please include the "Article Source:" as shown above and make it hyperlinked.

  Some other articles by Anthony Fontanelle
GM-Chrysler Merger Would Hurt State Budget
The automotive industry has been smoldered by different types of scorching pandemonium in the past six years plant closures, job cuts, ailing automaker's reputation and ...

One Car May No Longer Fit All
One car for the family no longer fits all. Car manufacturers mix up auto parts, lines, styles, hues and amenities to especially cater to the needs of a particular cluster of individuals. As evidenced by ...

Dribble Your Way to Owning a Dodge Ram
Dodge, the DaimlerChrysler division, is about to give away one Dodge Ram 1500 SLT Quad Cab unit that will come equipped with a HEMI engine. The car manufacturer invites consumers to "Dribble for a Dodge". The contest ...

Chicago Auto Show Organizers Offer Tips to Car Fans
The 2007 Chicago Auto Show is nearing its final days, and tough weather seems to be playing a major role in the attendance of car ...

Chrysler's Weakness Attracts More Suitors
DaimlerChrysler AG's announcement Wednesday is expected to create a whirl of speculation about who would be interested in the Auburn Hills-based Chrysler. With a large amount of capital available ...

Chrysler's 'Valentine Bomb' Explodes At Auburn Hills
Valentine's Day is supposed to be lovely. But at Auburn Hills the sentiment is on the exact opposite. Chrysler's workers know that a vicious "Valentine bomb" is about to blast. It will not only harm ...

  Recent Articles
Lean Business System Key to Toyota's Success
by Glady Reign

Camry Hybrid 50th Anniversary Edition to hit Showrooms in March
by Glady Reign

Mariner Receives Upgrade for 2008 Model Year
by Glady Reign

The Ford F-350: A Heavy Duty Vehicle
by Glady Reign

Kumho to Supply Tires for DaimlerChrysler AG
by Glady Reign

Ultra Cool Audi R8 to Be Auctioned To Benefit Fight against AIDS
by Glady Reign

Volvo Bids $1B For Nissan Diesel
by Anthony Fontanelle

GM-Chrysler Merger Would Hurt State Budget
by Anthony Fontanelle

One Car May No Longer Fit All
by Anthony Fontanelle

SIRIUS Satellite Radio and XM Satellite Radio to Merge
by Lauren Woods

2008 Cadillac CTS, Other Cadillac Vehicles Showcased in Geneva
by Lauren Woods

Subaru Vehicles Take Home Highest NHTSA Ratings
by James Russel

Can't connect to database