Isuzu Motors has completed the transaction to acquire Japan-based UD Trucks (formerly long known as Nissan Diesel) from the Volvo Group for approximately $2.2 billion.

The transaction is estimated to have a positive impact on the Volvo Group’s operating income in the second quarter 2021 of close to $230 million and increase the Volvo Group’s net cash position by approximately $2.2 billion, Volvo officials said in a press release.

Under the deal, the two OEMs created a 20-year strategic alliance within commerical vehicles, and upon the completion of the acquistion, it became operational.

The alliance between Volvo and Isuzu is now entering the next phase to derive potential synergies in areas that will encompass:

• Forming a technology partnership, intended to leverage the parties’ complementary areas of expertise within both well-known and new technologies and creating a larger volume base to support investments for technology.

• Creating the best long-term conditions for a stronger heavy-duty truck business for UD Trucks and Isuzu Motors in Japan and across international markets by transferring ownership of the complete UD Trucks business from the Volvo Group to Isuzu Motors.

• Exploring further opportunities for even broader and deeper collaboration within the commercial vehicle businesses across geographical areas and product lines for future urban logistics solutions.

• Exploring cooperation in the areas of purchasing and logistics, leveraging common technology, as well as the geographical footprint complementarity and volume expansion.

Volvo and Isuzu will establish a Joint Alliance Office, with facilities both in Japan and Sweden, which will be overseen by an Alliance Board comprising the Isuzu president, the Volvo Group chief executive officer and other key executives from the two groups.

In 2012, Volvo ended production of UD medium-duty trucks for the U.S. market due to a decline in demand in the cab-over-engine segment and increase regulatory costs.