AB Volvo has completed the previously announced purchase of more than 22 million shares in Deutz AG, increasing its stake in the Cologne, Germany-based engine maker from 6.7 percent to more than 25 percent. Following an announcement in June 2012, AB Volvo acquired more than 22 million shares from former majority shareholder Same Deutz-Fahr for about €130 million (about U.S. $169 million). As a result of the transaction, AB Volvo has become the largest Deutz AG shareholder.
Agricultural machinery manufacturer Same Deutz-Fahr still holds about 8.4 percent and will maintain its relationship as both a customer and supplier as well as continuing its strategic partnership with Deutz.
This past spring, Deutz and Volvo signed a memorandum of understanding with the goal of exploring the option of extending their long-term alliance by jointly developing a new generation of medium-duty engines for industrial applications. As part of the memorandum, the two companies are also analyzing the terms and conditions for establishing a joint venture in China in which Deutz would hold a majority ownership interest. The production company optimizes Deutz’ Asia strategy and would support the Volvo Group’s expected growth in Asia by manufacturing medium-duty engines for industrial applications.
