Volvo sends UD to Isuzu in strategic alliance


Non-binding Memorandum of Understanding signed between truckmakers

Volvo sends UD to Isuzu in strategic alliance
Volvo and Isuzu aim for an alliance

 

Volvo and Isuzu are linking in move that will see UD Trucks become a part of its Japanese rival.

The move aims to "form a strategic alliance within commercial vehicles in order to capture the opportunities in the ongoing transformation of the industry", the prospective partners say. 

The link will begin with a global technology partnership.

The transfer is seen as create a stronger, combined heavy-duty truck business for Isuzu and UD in Japan and across international markets, in order to accelerate growth by leveraging greater volumes and complementary capabilities.

"There is great complementarity between the two Groups from both a geographical and product line perspective, with further opportunities to be explored over time," the partners say.

The enterprise value for the complete UD Trucks business is put at the equivalent of about A$3.4 billion and will be subject to the final scope of the business transferred and Isuzu’s due diligence.

"The Volvo Group and Isuzu Motors have a well-established relationship on medium-duty trucks in Japan based on mutual respect, shared values and win-win spirit," Volvo Group president and CEO Martin Lundstedt says.

"We see great potential to extend our cooperation within technology, sales and service as well as other areas going forward, for the benefit of our customers and business partners.

"Our UD Trucks colleagues have done a great job to improve performance in recent years and the alliance opens up a great opportunity to continue the successful journey." 

Both firms insist here is great complementarity between the two Groups from both a geographical and product line perspective, with further opportunities to be explored over time.

"Isuzu Motors and the Volvo Group strongly believe in the business opportunities and synergy potential between the two Groups," Isuzu president and representative Masanori Katayama says.

"We intend to derive the full value from each other's different specialties across product and geographical strongholds. Our collaboration will actively contribute to service improvements and strengthened customer satisfaction as well as to prepare ourselves for the forthcoming logistics revolution.

The intended strategic alliance:   

  • forming a technology partnership, which will leverage the parties’ complementary areas of expertise within both well-known and new technologies as well as to create a larger volume base to support necessary, forthcoming technology investments 
  • creating the best long-term conditions for a stronger heavy-duty truck business for UD Trucks and Isuzu Motors in Japan and across international markets
  • exploring opportunities for even broader and deeper collaboration within the commercial vehicle business across geographical areas and product lines, such as light- and medium-duty trucks. 

All technology cooperation between the Volvo Group and Isuzu will be managed through individual contracts. 

The MoU is non-binding.

The next steps will be finalising the scope of the business to be transferred, due diligence by Isuzu Motors and negotiations of binding agreements.

Signing of binding agreements is expected by mid-2020 and closing of the transaction is expected by the end of 2020. All potential transactions will be subject to regulatory and other approvals. 

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