Vovlo Eicher Commercial Vehicles Ltd (VECV) a subsidiary of Eicher Motors Ltd has signed definitive agreements for acquisition and integration of Volvo Buses India business into itself for a cash consideration of ₹100.5 crore, Eicher Motors said in a filing with stock exchanges.
A new bus division will be formed at VECV that will house both the Eicher and Volvo bus businesses. It will be headed by Volvo Bus Corporation’s Akash Passey, who will repatriate to India and move to VECV. He will report to Vinod Agarwal, MD & CEO, VECV. The deal is expected to conclude in the next two months, top company executives in a video conference.
The bus manufacturing plant of Volvo at Hoskote in Karnataka and its 500 employees would be transferred to VECV.
The deal would benefit both the companies, with Volvo getting access to VECV’s wide domestic sourcing as well as after sales network while Eicher will get access to Volvo’s technology and global sales reach, executives said.
The focus will now be tapping the mid-premium bus segment priced in the range of ₹30 lakh to ₹1 crore, they added.
The agreements will cover the manufacture, assembly, distribution, and sale of the Volvo Buses in India, and other rights forming part of the business.
Siddhartha Lal, chairman, VECV in a statement said, “With the integration of Volvo Buses 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.”
“By consolidating the operations of Volvo Buses India 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”, said Håkan Agnevall, president, Volvo Bus Corporation.
Vinod Aggarwal, MD & CEO, VECV said, “VECV’s strong presence in the Indian bus market with Eicher branded buses will be complemented by Volvo Buses’ prominent position in the premium bus segment. With this integration, VECV will be able to leverage synergies in the areas of product development, purchasing and manufacturing with access to Volvo Group’s world class technology in buses.”