AFP

Volvo will infuse $275 million to acquire 45.6 per cent stake in a proposed joint venture with commercial vehicle maker Eicher Motors

The government on Thursday approved Sweden-based truck maker AB Volvo’s plans to acquire 45.6 per cent stake in a proposed joint venture with home-grown commercial vehicle maker Eicher Motors in which the foreign firm will infuse $275 million (about Rs 1,100 crore).
The government also approved Shipping Corporation of India’s (SCI) proposal to invest $238.2 million (about Rs 952.8 crore) to acquire four bulk carriers. The approvals were given at the meeting of Cabinet Committee on Economic Affairs (CCEA) held on Thursday.
Eicher and AB Volvo finalised their agreement to float a joint venture company (JVC) — VE Commercial Vehicles — in India in May this year. The two firms have agreed to transfer their existing commercial vehicle portfolio in India to the new JV.
Eicher would transfer its entire truck and bus operations to the JVC while Volvo would transfer its present and future truck operations, including distribution and service operations, to the new firm. Eicher also proposes to transfer its manufacturing unit in Pithampur, Madhya Pradesh to the JV firm.
The Indian firm would hold a majority 54.4 per cent stake in the JV. Volvo would also invest Rs 157.4 crore in EML to acquire an 8.1 per cent stake in the company. The Swedish firm’s economic interest in the JVC would thus increase to 50 per cent.