Volvo Group has agreed to sell its UD Trucks unit to Isuzu Motors Ltd. for about $2.3 billion and announced plans to forge a strategic alliance with its Japanese rival, the latest sign of consolidation in the global automotive industry.
UD Trucks, based in Saitama, Japan, used to be part of Nissan Motor Co. before it was sold to Volvo more than a decade ago. Isuzu, which sold 530,000 vehicles last year, will acquire all of the truck-maker, the companies said in a statement Wednesday.
The deal will boost Volvo Group's operating income by about 2 billion kronor ($212 million) and increase the Swedish company's cash position by 22 billion kronor. Isuzu shares fell as much as 5.1 percent Thursday.