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Volvo abandons efforts to divest government sales unit

Volvo Group discontinues attempts to divest itself of governmental sales business unit, after it began the process of seeking buyers for the division in November 2016

A Mack-branded Sherpa military vehicle manufactured by Volvo Group for defense applications.
A Mack-branded Sherpa military vehicle manufactured by Volvo Group for defense applications.

Volvo Group has discontinued its attempts to divest itself of its governmental sales business unit, just short of a year after it began the process of seeking buyers for the division back in November 2016.

“Our governmental sales operation has a positive development [trajectory] and a strong order book,” said Jan Gurander, deputy CEO and CFO for the Volvo Group.

“We have previously announced our intention to divest this business, but the offers we have received do not reflect its value. We have therefore decided to discontinue the divestment process.”

Read more: Volvo CE divests British dealership to SMT Holdings

Governmental sales, which primarily involve specialist vehicle for defence, peacekeeping forces and aid distribution applications, currently account for approximately 1.5% of Volvo Group’s total sales and employs 1,300 people, primarily in France.

This September, Volvo Construction Equipment (Volvo CE) announced it has divested its British dealership.

The Sweden-headquartered machinery manufacturer, which forms part of AB Volvo, said it had concluded the sale of its Volvo Construction Equipment GB dealership to Services Machinery & Trucks, a newly established subsidiary of long-term distribution partner, SMT Holdings.

Under the terms of the deal, SMT would take ownership of Volvo-branded construction equipment, parts, and aftersales activities in Great Britain.

The sale also included Volvo CE’s GB headquarters in Duxford, Cambridgeshire, its nationwide operations, most other assets, and the transfer of all employees.

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