Volvo and Mitsubishi Motors Corp. have signed a contract specifying the conditions for Volvo's acquisition of 19.9% of Mitsubishi Fuso Truck & Bus Co.

In conjunction with the transformation of the truck and bus division into a subsidiary of Mitsubishi Motors, a new share issue will be implemented. At that time, Volvo will provide a capital contribution to Mitsubishi Fuso totaling about 3.2 billion kroner ($345 million) in exchange for newly issued shares. The transaction is expected to take place in July 2001.
In addition to the fixed portion of the purchase price, Volvo said it may also pay an additional amount depending on the profit performance of Mitsubishi Fuso from 2002 through 2005.
The agreement also clarifies the separation of Mitsubishi's truck and bus business and its passenger car and light commercial vehicle business where Mitsubishi partners with DaimlerChrysler.
"The cooperation with Mitsubishi on the next generation of medium-heavy trucks is developing well," said Volvo CEO Leif Johansson. "With today's agreement. . .we are taking another important step in our global strategy for trucks and buses, in which Asia is playing an important role, especially in view of the upturn we see in that part of the world."