Volvo Divests Property Portfolio for EUR 279M

Sweden — The Volvo Group has signed an agreement regarding the sale of properties in the areas of Arendal, Torslanda and Säve in Gothenburg, Sweden. The transaction price amounts to SEK 2.7 bn (EUR 279M) on a debt free basis and the divestment results in a capital gain of SEK 1.4 bn (EUR 145M), which is expected to impact Volvo’s operating income by the corresponding amount in the fourth quarter of 2016.

2016-10-21

The divestment is part of a long-term plan to gather the majority of Volvo Group office workers in Gothenburg in an area that will be called Campus Lundby. The Volvo Group will rent some of the properties that are sold during a transitional period, pending the completion of Campus Lundby.

The Volvo Group’s operating cash flow and financial net debt will be positively affected in the amounts of SEK 2.6 bn (EUR 268M) and SEK 2.3 bn (EUR 237M), respectively, in conjunction with the closing of the transaction, which is expected to be carried out in the fourth quarter of 2016.

The properties are estimated to have an annual rental value of approximately MSEK 300 (EUR 31M). The buyer is Platzer.

JLL has been the sellers advisor.