Volvo sells 4.7% stake in Eicher for Rs 1,920 crore

Commercial vehicle major Volvo Group sold around 4.7 per cent stake in Eicher Motors for over Rs 1920 crore.
AB Volvo has today (i.e. 4th March) divested 12.7 lakh shares, representing approximately 4.7 per cent of Eicher Motors Limiteds equity capital, Eicher Motors Ltd said in a statement.
As a part of the transaction, in addition to acquiring 45.6 per cent of the shareholding of VECV, AB Volvo had also acquired 22.75 lakh shares of EML representing 8.4 per cent of equity capital of the company.
This divestment will have no bearing whatsoever on VE Commercial Vehicles Limited (VECV), which will continue to be governed as an equal partnership venture, the statement adds.
In May 2008 AB Volvo and Eicher Motors Limited (EML) had entered into a joint venture agreement to create VECV with the intent to drive modernisation in the commercial vehicle industry in India and the developing world.  These investments along with other strategic initiatives have shaped VECV into a highly differentiated company. It has an extremely unique business model that ensured that it was the only commercial vehicle player in India to have remained profitable throughout the prolonged downturn. Both the joint venture partners are committed to nurture this further in the exciting period that lies ahead, as the commercial vehicle industry looks to revive after a long period of downturn, an Eicher Motors spokesperson said.

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