Volvo Construction Equipment (Volvo CE) has confirmed it has finalised the divestment of its stake in China-based SDLG (Shandong Lingong Construction Machinery Co).
Volvo CE has divested its ownership of SLDG to a fund which is predominantly owned by Lingong Group (LGG) for SEK 8 billion (6 billion RMB).
“The transaction is expected to have a positive effect of approximately SEK 1 billion on operating income as of closing, subject to currency fluctuations,” Volvo CE said in a statement.
“Going forward, Volvo CE will be targeting focused customer segments in China and enhance its utilization of the Chinese supplier eco system.”
Streamlined in China
Volvo CE had announced its intention to divest its stake earlier this year. It came after the company decided to change its approach to the market.
The company will continue to pursue its customer segments in China through its premium products and services.
“SDLG has served us well since 2006. However, with increasing competition, and the need to transform to new technologies as well as strengthen interaction with customers, we need to re-focus,” Volvo CE CEO Melker Jernberg said.
“China remains an important market for us, and we aim to capitalise on our opportunities by focusing on sustainable solutions in targeted segments. We also plan to leverage the excellent industrial system in China.”
