NEW DELHI, Aug 13: Eicher Motors on Thursday said its subsidiary VE Commercial Vehicles has entered into a business transfer agreement to acquire Volvo Group India’s bus business for a cash consideration of Rs 100.50 crore.
VE Commercial Vehicles Ltd (VECV) is in the business of manufacturing and selling the Eicher branded trucks and buses and also distributes Volvo branded trucks and provides aftermarket services and distribution of spare parts for Volvo branded trucks and buses.
Apart from being a subsidiary of the company, VCEV is also a joint venture between Eicher Motors and Volvo Truck Corporation, Sweden and Aktiebolaget Volvo (Publ.), Sweden.
VECV entered into a business transfer agreement on August 12 with Volvo Group India for acquisition, as a going concern on slump sale basis, of the bus business of Volvo Group India, Eicher Motors said in a regulatory filing.
The agreement is for manufacture, assembly, distribution, and sale of the Volvo buses in India, and other rights forming part of the said business, for a consideration of Rs 100.50 crore, it said.
Consequently, the bus manufacturing facility at Hosakote, Bengaluru, and all employees of Volvo Bus India (VBI) will be transferred to VECV, the company said.
“With the integration of Volvo Bus India into VECV, we aim to shape the future of the Indian bus industry by offering the widest range of transport solutions to our customers.
“Post the completion of the transaction, VECV and VBI will consolidate their bus businesses into a newly formed bus division within VECV. This division will offer Volvo and Eicher branded buses, and will maximise synergies to capitalise on market opportunities,” Siddhartha Lal, Chairman, VECV said.
This strategy will be extended to exports, wherein the new bus division will offer products and services that are complementary with Volvo Buses’ core product portfolio in select international markets,Lal added.
Håkan Agnevall, President of Volvo Bus Corporation said that by consolidating the operations of VBI into VECV, “we aim to further develop our bus business and strengthen our position in the Indian bus market. The new bus division will offer a full range of modern buses covering customer needs for heavy, medium and light duty buses”.
The transaction will be completed once the conditions under the agreements are fulfilled and the final business transfer is expected to be closed within the next two months, Eicher Motors said.
(PTI)
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