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Yahoo
26-06-2025
- Business
- Yahoo
Volvo CE to sell off ownership in China-based SDLG
This story was originally published on Manufacturing Dive. To receive daily news and insights, subscribe to our free daily Manufacturing Dive newsletter. Volvo Construction Equipment is selling its 70% stake in China's Shandong Lingong Construction Machinery Co as part of a strategic revamp to reduce its exposure to the country. The multinational company said Tuesday that its shares, valued at 8 billion Swedish krona (nearly $839 million), will be sold to a fund largely owned by the Lingong Group, a minority owner of SDLG. The deal would allow Volvo CE, a subsidiary of Volvo Group, to refocus its business strategy and to have a more targeted approach to serving China's construction equipment market with premium products. The sale is expected to close later this year if approved by regulators. Since 2006, Volvo CE has held a majority stake in SDLG as a way to gain access to China's domestic construction equipment market. The company said its investment and collaboration with LGG has been successful over the years, but with changing market dynamics, the two have agreed to part ways and pursue business strategies that would be 'mutually beneficial.' '[W]ith increasing competition, and the need to transform to new technologies as well as strengthen interaction with customers, we need to re-focus,' Malker Jernberg, head of Volvo CE, said in a statement. Selling Volvo CE's majority stake would make SDLG, previously a joint venture, a primarily Chinese-owned company. SDLG is one of China's largest construction equipment makers known for producing excavators, wheel loaders and road rollers. The size of the country's market is valued at $223.7 billion as of last year, and has grown at an average rate of 12.5% over the past five years, according to IBISWorld. The decision to sell Volvo CE's ownership comes as many U.S. companies move their supply chains out of China to nearby countries, in part because of rising labor costs and recent tariff pressures. Last year, roughly 20% of U.S. businesses in China said they would cut investments over concerns regarding the country's slowing growth, according to a survey conducted by the American Chamber of Commerce in Shanghai. Meanwhile, 40% of respondents said they were redirecting investments, with Southeast Asia and India as popular choices. 'China remains an important market for us, and we aim to capitalize on our opportunities by focusing on sustainable solutions in targeted segments,' Jernberg added. Volvo CE has operated its excavator factory in Shanghai since 2002, and recently announced plans to upgrade the facility with new production lines. The company is also moving forward with plans to transform a research and development center in Jinan, China, into the Global Technology System of Volvo CE, for expanded innovation and collaboration around the world. As Volvo CE retools its presence in China, the company is also expanding across other countries. It recently agreed to acquire European retail business Swecon from Lantmännen to bolster operations in Germany, Sweden, Estonia, Latvia and Lithuania. Volvo CE also said it will begin producing crawler excavators and large wheel loaders at its Shippensburg, Pennsylvania, facility as part of a $261 million global investment aimed at mitigating supply chain risks related to tariffs. Volvo CE has 16 manufacturing sites across the U.S., Canada and Mexico, according to its website. The subsidiary's North American headquarters is in Shippensburg. Recommended Reading Volvo to expand US construction equipment production Sign in to access your portfolio
Wall Street Journal
24-06-2025
- Business
- Wall Street Journal
Volvo Sells Stake in Chinese Construction Equipment Maker for $833 Million
STOCKHOLM—Volvo VOLV.B -0.23%decrease; red down pointing triangle has agreed to sell its 70% stake in Chinese construction equipment manufacturer Shandong Lingong Construction Machinery Co for around $833 million. Volvo bought the stake in 2006, giving it access to the domestic Chinese construction equipment market, but has now agreed to sell its holding to minority shareholder Lingong Group.
Reuters
24-06-2025
- Business
- Reuters
Volvo Construction Equipment to sell stake in China's SDLG for $837 million
COPENHAGEN, June 24 (Reuters) - Volvo's ( opens new tab Construction Equipment (CE) unit said on Tuesday it will sell its 70% stake in China's Shandong Lingong Construction Machinery Co to a fund primarily owned by minority owner Lingong Group for 8 billion Swedish crowns ($837 million). In a separate statement, Volvo CE said it had agreed to buy engineering consultancy company Swecon's business operations in Sweden, Germany and the Baltics for 7 billion Swedish crowns ($731.45 million). "With increasing competition, the need to transform to new technologies as well as strengthening the interaction with customers, we need to re-focus," Melker Jernberg, head of Volvo CE, said in a statement on the Chinese transaction. ($1 = 9.5583 Swedish crowns)
Yahoo
24-06-2025
- Business
- Yahoo
Volvo Construction Equipment refocuses its presence in China - divests its shares in SDLG
GOTHENBURG, Sweden, June 24, 2025 /PRNewswire/ -- Volvo Construction Equipment (Volvo CE) has signed a contract to sell its ownership in China-based SDLG (Shandong Lingong Construction Machinery Co) to a fund predominantly owned by the Lingong Group (LGG) for SEK 8 billion (6 billion RMB.) The transaction is expected to have a positive effect of SEK 1 billion on operating income at the time of closing, subject to currency fluctuations. Going forward, Volvo CE will be targeting focused customer segments in China and enhance its utilization of the Chinese supplier eco system. Volvo CE will: Sell its entire stake of 70% of the shares in SDLG to a fund predominantly owned by the SDLG minority owner LGG Focus on offering Volvo branded premium products and services to focused customer segments in China Utilize its system in China as a production and development center serving both the domestic and export markets In 2006, Volvo CE acquired a majority stake in SDLG, with LGG as a minority shareholder. The strategic investment gave Volvo CE access to the important domestic Chinese construction equipment market. The SDLG collaboration has been successful, but for strategic reasons Volvo and LGG now believe it would be mutually beneficial to pursue independent business strategies. Therefore, the parties have agreed that a fund predominantly owned by LGG will take ownership of Volvo's SDLG shares. In 2024, the SDLG revenue contribution was approximately 2% of Volvo Group turnover with an insignificant impact on the Volvo Group's operating income. The transaction is currently estimated to have a positive effect on the segment Construction Equipment's operating income of SEK 1 billion at the time of closing, subject to fluctuations in currency exchange rates up to the time of closing. Closing is expected to occur in the second half of 2025, subject to regulatory approvals and other conditions. The effect will be excluded from adjusted operating income. The transaction is also expected to have a negative tax impact of SEK 1.6 billion, subject to currency fluctuations. Melker Jernberg, Head of Volvo CE, says, "SDLG has served us well since 2006. However, with increasing competition, the need to transform to new technologies as well as strengthening the interaction with customers, we need to re-focus. China remains an important market for us, and we aim to capitalize on our opportunities by focusing on sustainable solutions in targeted segments. We also plan to leverage the excellent industrial system in China." Premium products and services for specific targeted segments Volvo CE will maintain its strategic focus on leading the development of sustainable solutions within the Chinese construction industry, targeting key segments such as mining, quarry & aggregates, and heavy infrastructure. The emphasis will be on providing tailored and comprehensive solutions that address specific customer needs while developing a sustainable distribution roadmap suited to the highly competitive landscape. The operations in China serve as a globally competitive production and development center, catering both domestic and export markets. To leverage the quality and cost advantages present in the competitive industrial environment, Volvo CE has operated an excavator production facility in Shanghai since 2002 and has recently announced the establishment of new production lines. Moving forward, China will remain a crucial component of the value chain and a base for numerous suppliers, both domestic and international. June 24, 2025 This information is information that AB Volvo (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 08:00 CEST on June 24, 2025. Journalists wanting further information, please contact:Claes Eliasson, Head of Media Relations+46 76 553 7229press@ For more information, please visit For frequent updates, follow us on LinkedIn The Volvo Group drives prosperity through transport and infrastructure solutions, offering trucks, buses, construction equipment, power solutions for marine and industrial applications, financing and services that increase our customers' uptime and productivity. Founded in 1927, the Volvo Group is committed to shaping the future landscape of sustainable transport and infrastructure solutions. The Volvo Group is headquartered in Gothenburg, Sweden, employs more than 100,000 people and serves customers in almost 190 markets. In 2024, net sales amounted to SEK 527 billion (EUR 46 billion). Volvo shares are listed on Nasdaq Stockholm. This information was brought to you by Cision The following files are available for download: Press Release - Volvo Construction Equipment refocuses its presence in China â€" divests its shares in SDLG 2025-volvo-flags View original content: SOURCE AB Volvo Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
