The Board of Directors of AB Volvo has today decided to acquire a maximum of 10 percent of the total number of shares of Volvo, corresponding to a maximum of 44,152,088 shares, by offering the shareholders of Volvo to sell every tenth share to Volvo for a cash payment of SEK 264 per Series A share and SEK 271 per Series B share, corresponding to a premium of approximately 30 percent. If the repurchase offer is fully accepted, SEK 11,868 M will be transferred to the shareholders of Volvo. 

Background and reasons

On April 26, 2000, the Annual General Meeting of Volvo decided to authorize the Board of Directors to decide on repurchase of Volvo's own shares in order to be able to continuously adjust Volvo's capital structure to the company's capital needs, and to be able to transfer shares in connection with fulfillment of incentive programs prevailing within Volvo or as a means of financing acquisitions. 

On April 25, 2000, Volvo and Renault concluded discussions on a proposed Memorandum of Understanding whereby Volvo will acquire Renault's truck business, Renault VI/Mack, in exchange for 15 percent of the shares in Volvo. The transaction will nearly double the volume of Volvo's truck business and as a result of a strengthened global presence and growth potential will create opportunities for added value for customers, employees and shareholders. The proposed transaction is conditional upon required approval from regulatory authorities, on terms acceptable to the parties, and that final agreements with Renault are concluded.  

Following necessary approvals, Volvo will transfer 10 percent of the A and the B shares in AB Volvo as a partial payment to Renault in exchange for 100 percent of the shares in Renault VI/Mack. If the repurchase offer is not fully accepted, Volvo intends to acquire the remaining shares in the market. Volvo will transfer the remaining payment of 5 percent of the shares in Volvo to Renault subsequent to Volvo completing any further repurchase of own shares. 

Terms and conditions

For each share of Volvo held, one sales right of the corresponding series will be received. Ten sales rights of the same series entitle the holder thereof to sell one share of the corresponding series. SEK 264 will be paid in cash for each Series A share in Volvo and SEK 271 will be paid in cash for each Series B share in Volvo. The offered repurchase price per share corresponds to a premium of SEK 60.65 per share, regardless of series. The premium has been calculated as approx. 30 percent of the average of the last closing prices paid on the OM Stockholm Exchange for Volvo's Series A share during the period. 

(May 19, 2000)