Volvo to buy out Nissan Diesel for $1.1 billion

Mumbai: Volvo AB, the world's second-largest truck maker, has agreed to buy Nissan Diesel Motor Co., Japan's fourth-largest truck maker, for 7.5 billion kronor ($1.1 billion).

Volvo, which already owns 19 per cent of Nissan Diesel, hopes the acquisition of a regional brand name to drive production and growth in Asia, the world's fastest-growing economic region.

Under the deal, Nissan Diesel shareholders will receive 540 yen a share. The price is 22 per cent higher than Nissan Diesel's February 19 closing price on the Tokyo Stock Exchange, Gothenburg, Sweden-based Volvo said in a statement.

Volvo, which last year sold seven per cent of its trucks in Asia, is also looking at Nissan Diesel's technology that can reduce engine emissions as countries tighten pollution standards.

The Swedish truck maker, 20 per cent owned by Renault SA, bought a 13 per cent stake in Nissan Diesel in March last year for 1.5 billion Swedish kronor. Volvo boosted its stake to 19 per cent in September. Volvo plans to complete the buyout by the end of March.

The Volvo-Nissan Diesel combine would boost combined profit by $263 million (200 million euros) a year within five years. The companies also agreed to share sales networks in Japan, China and North America and develop engines together.