Volvo has signed an agreement with Deutz to increase their shareholding from 6.7 percent to more than 25 percent, making Volvo the single largest Deutz shareholder.
Volvo bought approximately $163 million shares from Same Deutz-Fahr Group (SDF), paying just over $7 per share. Once the transaction is complete, SDF will own 8.44 percent of shares in Deutz. Volvo will own more than 22 million shares.
This agreement comes on the heels of a non-binding memorandum of understanding Volvo and Deutz signed in April. The memorandum provides the intention to explore the potential to extend the companies’ long-term cooperation through joint development of the next generation of medium-duty engines for off-road applications. It also aims at analyzing the conditions for establishing a joint venture in China for the production of medium-duty engines for off-road applications.
The transaction is scheduled to be finalized in the third quarter of this year. Volvo currently owns 8,097,754 shares in Deutz, corresponding to a 6.7 percent shareholding.
For more information, visit volvogroup.com.