Volvo 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 to house both 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. 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, the companies’ executives said.
The focus will now be to tap the mid-premium bus segment priced in the range of ₹30 lakh-₹1crore, 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.