(Reuters) – Truckmaker AB Volvo VOLVb.ST and Japan’s Isuzu Motors 7202.T have inked a binding agreement for their previously announced strategic alliance, which includes Isuzu buying Volvo’s UD Trucks for around 20 billion Swedish crowns (1.8 billion pounds).
The final agreement follow a memorandum of understanding between the two companies, signed in December last year, and closing is expected during the first half of 2021, Volvo said in a statement.
“The transaction is subject to certain conditions, including approval from regulatory authorities,” Volvo said.
Volvo expects a positive 2 billion crown impact on its operating income from the deal, while its net cash position in the industrial operation is seen increasing by some 20 billion crowns.
Reporting by Johannes Hellstrom; editing by Niklas Pollard