Nissan Motor to Sell Nissan Diesel Stake

Posted on March 21, 2006

The Associated Press is reporting that Nissan Motor Co. will sell 13 percent of Nissan Diesel to Volvo AB for $196 million, the two companies said.

The deal will make Volvo the largest shareholder in Nissan Diesel, Japan's fourth-largest truck manufacturer, leaving Nissan with about a 6 percent stake. Renault holds a 44 percent stake in Nissan Motor and about 20 percent of Volvo's stock. Renault sold its truck division to Volvo in 2001.

Nissan Chief Executive Carlos Ghosn said "We are gladly selling the shares to Volvo because Nissan Diesel and Volvo are a very strong fit." He added that the Nissan is willing to sell more shares to Volvo.

Volvo said that the deal would help the Swedish truck-maker gain a foothold in Asia. "Nissan Diesel has undergone a major and positive change in recent years and is today one of Asia's leading manufacturers of trucks," Leif Johanson, president and CEO of Volvo said. He said Nissan Diesel complements Volvo's products and geographical presence and that the deal "opens possibilities for cooperation within production, sales and aftermarket."

Nissan Diesel Motor Co. will retain its name even though Volvo will become the top shareholder. The sale will be completed by March 29, Nissan Diesel said.

Nissan Motor and Volvo also said the two agreed to review an area of cooperation, together with Dongfeng Motor Co., in commercial vehicle business in China. Nissan owns 50 percent of Dongfeng Motor.