Volvo Aero has signed an agreement to sell its US subsidiary Volvo Aero Services. The sale is expected to have a negative impact of approximately SEK 200 M on the Volvo Group’s operating income during the second quarter. At the same time, the transaction is expected to have a positive effect of about SEK 400 M on the Group’s net financial debt in the third quarter.
The sale of Volvo Aero Services is due to Volvo Aero’s strategy of focusing on its core operations of developing and manufacturing components for aircraft engines, combined with the goal of reducing the company’s tied-up capital.
“This decision is in line with our strategy to grow as a component manufacturer in the aerospace industry,” says Volvo Aero’s President, Staffan Zackrisson. “Over time, we have seen that the synergies between our operations and those conducted by Volvo Aero Services are minimal.”
The operations pertaining to maintenance of engines and gas turbines currently carried out in Trollhättan will not be impacted by the transaction.
The sale is expected to have a negative impact of approximately SEK 200 M on the Volvo Group’s operating income during the second quarter. The sale is among other things contingent on customary approvals being obtained and completion is expected to take place in the third quarter of 2010, at which point it is forecast to have a positive effect of about SEK 400 M on the Group’s net financial debt.
Volvo Aero Services’ sales during 2009 amounted to SEK 1.4 bn. The divestiture will impact a total of 160 employees at Volvo Aero Services in North America.
July 12, 2010
Journalists who want further information, please contact Volvo Aero’s Director Corporate Communications, Fredrik Fryklund, at +46 (0)520-94 401 or +46 (0)703-19 23 96.