Volvo is considering sale of its Volvo Aero divisionMonday, 21 November 2011
Vehicle Group AB Volvo launched a process aimed at selling its Volvo Aero, division which focuses on the manufacture of aircraft engines.
The intension is properly described in a press release from AB Volvo as "an effort to further refine the Volvo Group to heavy commercial vehicles."
"We are in the current situation in discussions with a number of potential buyers but it is still at an early stage and no definite decision has yet been made," says Volvo CEO Olof Persson.
Advertisement“One of the prerequisites for a transaction being implemented is that a divestment could enable Volvo Aero to enter into a structure that would enhance the company’s opportunities for further development in its sector,” says Volvo CEO Olof Persson. “Another requirement is that we are paid a reasonable price. We are currently conducting talks with a number of potential buyers, but these are still at an early stage and no definite decisions have been made.
Volvo Aero is today a leading manufacturer of aerospace components and its products are found in more than 90 percent of the world’s large civil aircraft.
Since streamlining towards commercial vehicles was initiated by the Volvo Group at the end of the 1990s, in conjunction with the divestment of Volvo Car Corporation, the Group has expanded to become one of the world’s leading manufacturers of heavy duty trucks, buses, construction equipment, industrial and marine engines and heavy duty diesel engines.
Volvo shares, in common with many other shares on the Stockholm Stock Exchange have been hard pressed today. But it picked up when the news of the group management reported that it was in talks to sell Volvo Aero became known.
Volvo Aero is responsible for approximately three percent of Volvo's total sales. Sales last year landed atSkr7.7 billion and operating profit of Skr 286 million.
In Sweden, the company has around 2220 employees, which Trollhättan is the capital of that division of the company.
How far the Volvo has reached in the negotiations, Volvo’s press officer Marten Wikforss would not say.
“We are in talks with a number,” he says.
The reason that Volvo is going out with the news now is to avoid speculation, according to Wikforss.
By Scancomark.se Team
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