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Volvo divests 25% stake in Deutz engines

German engine-maker to retain close relationship with Swedish giant while raising profile as independent manufacturer

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Volvo CE has divested its entire stake in German engine-specialist Deutz to institutional investors, according to reports in the global media.

The Swedish construction equipment giant owned a 25% stake in the Cologne-based engine specialist, which is known for supplying engines to several large international equipment manufacturers, including Volvo CE-owned Chinese manufacturer SDLG.

All the shares Volvo CE owned in the German manufacturer are now reportedly in free float, increasing the overall liquidity of Deutz shares.

Deutz said that Volvo’s stake sale had not impacted its strong business relationship with the company, which goes back many years, according to reports.

Khl.com quoted Dr Frank Hiller, chairman of the Deutz board of management, as saying: “We will continue to work together closely with Volvo and will remain an important supplier, particularly in the construction equipment application segment. Following the sale of the investment, we can focus on raising our profile as an independent manufacturer of innovative drive systems.”

Volvo’s divestment in Deutz comes at the same time as its announcement of divesting its wholly-owned British dealership to SMT, its long-term distribution partner in the UK. Apart from the distribution rights for Volvo-branded construction equipment, the sale is also said to include parts and aftersales in the UK, as well as Volvo CE’s British headquarters in Cambridgeshire, its nationwide operations, most other assets and the transfer of all employees.

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