US Department of Justice Gives Clearance To AB Volvo for Purchase of Renault VI/Mack
AB Volvo and the United States Department of Justice have entered into a consent decree that is awaiting approval by US district court in Washington DC. AB Volvo has received clearance from the Department of Justice for acquisition of Renault VI/Mack. The approval is subject to the condition that Volvo Trucks' North American low cab-over-engine (LCOE) business be divested. This segment amounts to less than 3% of the total heavy-truck market in North America.
The Volvo Group is establishing a new business area, Volvo Global Trucks, comprising the Volvo, Renault, and Mack truck brands. Tryggve Sthen, chief executive officer for Volvo Trucks, will be CEO of the new business area. Volvo Global Trucks represents 70% of the Volvo Group's worldwide sales. Volvo Global Trucks is expected to be operational in early 2001.
In April 2000, AB Volvo and Renault SA concluded an agreement in principle whereby AB Volvo will receive 100% of Renault's truck operations, Renault VI/Mack, in exchange for 15% of AB Volvo's shares. The agreement was completed in July and approved by the European Union in September.
As a result of the acquisition, Volvo Group is becoming the world's second-largest and Europe's biggest manufacturer of heavy trucks, with almost twice its former volume of business.
Volvo Trucks' and Renault VI/Mack's combined sales in 1999 amounted to about 151,000 heavy trucks and 22,500 light- and medium-heavy trucks. Their combined share of the market for heavy trucks in Western Europe amounts to about 28%, and to about 24% of the market in North America.
The divestment involves only those assets associated with the LCOE operations, and will affect the Xpeditor models within Volvo Trucks North America. The Volvo trademark and assembly plants are not included.
