Isuzu Motors completes acquisition of UD Trucks from Volvo
Photo courtesy of Volvo Group

Isuzu Motors completes acquisition of UD Trucks from Volvo

Japan’s Isuzu Motors has completed its acquisition of UD Trucks from Sweden’s Volvo Group for an enterprise value of JPY243 billion  (USD2.2 billion) on a cash and debt-free basis. The strategic alliance within  commercial vehicles between the two groups, aiming to capture opportunities in the ongoing  industry transformation, will now also become operational.

UD Trucks Corporation is a Japanese company whose principal business is the manufacturing and sales of diesel trucks, buses, bus chassis and special-purpose vehicles. Its headquarters are located in Ageo, Saitama, Japan. Following this transaction, UD Trucks has become a wholly owned subsidiary of Isuzu Motors.

The alliance between the Volvo Group and Isuzu Motors is set to a build long-term and robust  relationship. Alliance work is now entering the next phase to derive potential synergies in areas that  will encompass but are not be limited to: 

◼ Forming a technology partnership, intended to leverage the parties’ complementary areas of  expertise within both well-known and new technologies and creating a larger volume base to  support investments for world-class technology.  

◼ Creating the best long-term conditions for a stronger heavy-duty truck business for UD Trucks  and Isuzu Motors in Japan and across international markets by transferring ownership of the  complete UD Trucks business from the Volvo Group to Isuzu Motors.  

◼ Exploring further opportunities for even broader and deeper collaboration within the commercial  vehicle businesses across geographical areas and product lines for future urban logistics  solutions.  

◼ Exploring cooperation in the areas of purchasing and logistics, leveraging common technology,  as well as the geographical footprint complementarity and volume expansion. 

The Volvo Group and Isuzu Motors will establish a joint alliance office, with facilities both in Japan  and Sweden, which will be overseen by an Alliance Board comprising the Isuzu Motors President,  the Volvo Group CEO and other key executives from the two groups.  

The alliance will have a minimum duration of 20 years and is intended to address possibilities  and challenges of the logistics industry of the future, maximizing value and benefits for customers as  well as for society. 

UD Trucks’ revenues for 2020 amounted to JPY261 billion (USD2.3 billion). The business  had a marginally positive impact on the Volvo Group’s operating income in the same period. 

In respect of Isuzu Motors’ acquisition of UD Trucks, an additional amount up to JPY15 billion  (USD0.14 billion) is to be paid to Volvo Group as an earnout subject to the performance of UD Trucks during the years 2021-2023.