Amritsar, NFAPost: VE Commercial Vehicles has entered into a business transfer agreement to acquire Volvo Group India’s bus business for a cash consideration of 1 billion rupees.
VECV, which is a subsidiary of Eicher Motors and also a joint venture between Eicher Motors and Volvo Truck Corp, Sweden and Aktiebolaget Volvo (Publ.), Sweden, entered into this business agreement as it looks to strengthen operations in the country.
“The move will strengthen Volvo and Eicher’s bus operations in India through synergies in product, purchasing, and manufacturing… The deal will make us a large player in the bus business with the widest range,” VECV Chief Executive Officer and Managing Director Vinod Aggarwal said.
This pact will cover manufacture, assembly, distribution, and sale of Volvo buses in India, and other rights forming part of the business, the company said.
No debt of the entity has been taken over by VECV, Aggarwal said.
The bus manufacturing facility at Bengaluru and all employees of Volvo Bus India will be transferred to VECV as part of this transaction.
Post the completion of the transaction, VECV and Volvo Bus India will be consolidated into a newly formed bus division within the former.
The newly formed division will offer Volvo and Eicher branded buses, and will maximise synergies to capitalise on market opportunities, the company 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,” the company added.
Post completion of the transaction Senior Vice President at Volvo Bus Corp. Akash Passey, will join as president of the new VECV bus division.
Passey said the new division will also engage further in the dynamic Indian market driven by megatrends such as urbanization, e-mobility and connectivity.
“The new bus division will offer a full range of modern buses covering customer needs for heavy, medium and light duty buses”, Volvo Bus Corp President Hakan Agnevall said by adding that “We are pleased with this development of Volvo Buses in India and see it as an opportunity to further build upon the successful JV company – VECV.”