Isuzu acquires UD Trucks from Volvo Group in €1.8bn deal

Japan's Isuzu Motors has completed the acquisition of UD Trucks from Geely-owned Volvo Group for a reported sum of JPY 243 billion (€1.86 billion), as part of a strategic alliance between the two automotive groups.

In a press release, Volvo said that the transaction was "estimated to have a positive impact" on the group's operating income in the second quarter increasing its net cash position by nearly €2 billion.

The alliance, which is aimed at exploring opportunities in the ongoing industrial transformation, will see the Swedish and Japanese automakers build a "long-term and robust relationship," according to the Volvo press release. The two will form a technology partnership looking to leverage each of the company's areas of expertise within current, widely available technology as well as new ones.

The alliance will also look at creating the optimal long-term conditions for a better and stronger heavy vehicle business for both UD and Isuzu in Japan and internationally, as well as looking as further opportunities for collaboration in the commercial vehicle business.

The deal also involves the establishment of a Joint Alliance Office with facilities in both Sweden and Japan, both of which will be overseen by a board comprised of the President of Isuzu Motors, the CEO of Volvo Group and other key executives from the two.

The new alliance is set to last at least 20 years and is intended to address the challenges of the future for the auto business, both technologically and logistically.

If UD Trucks performs well, Isuzu is to pay Volvo up to €117.5 million during 2021-2023 as an earnout subject.

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