Processing .....please wait.. 
The article has been forwarded.... 
Cabinet clears $275 Mn Volvo investment in JV with Eicher
By
IANS
New Delhi: The Cabinet Committee on Economic Affairs (CCEA) Thursday approved a foreign direct investment (FDI) of $275 million (Rs.10.43 billion) by Swedish auto major AB Volvo in a joint venture with Indian auto maker Eicher Motors.
Volvo will pick up a 45.6 percent stake (4,560,000 equity shares) in the paid-up equity of the joint venture company, Eicher Motors India Ltd (EMIL). Eicher Motors Ltd (EML) will hold the balance 54.4 percent equity and act as an operating-cum-holding company, a government spokesman said.
The $275 million investment will be in cash, he added.
The new joint venture will carry on the Indian company's commercial vehicle business, along with related components and design service business, which Eicher will transfer to EMIL.
Volvo on its part is demerging the sales and distribution network of Volvo India Pvt. Ltd and will transfer it to the new joint venture EMIL, the spokesman said.
The approval will be subject to compliance with Reserve Bank of India and Securities and Exchange Board of India guidelines, as well as foreign investment norms and the court's approval of the demerger of Volvo India's distribution business, he added.
In May this year, the Foreign Investment Promotion Board (FIPB) had referred this investment proposal to the CCEA as it involved FDI of more than Rs.6 billion.
A Volvo spokesperson had then told the media that the proposed joint venture would have exclusive distribution rights in India for all current and future trucks of AB Volvo.
Volvo will pick up a 45.6 percent stake (4,560,000 equity shares) in the paid-up equity of the joint venture company, Eicher Motors India Ltd (EMIL). Eicher Motors Ltd (EML) will hold the balance 54.4 percent equity and act as an operating-cum-holding company, a government spokesman said.
The $275 million investment will be in cash, he added.
The new joint venture will carry on the Indian company's commercial vehicle business, along with related components and design service business, which Eicher will transfer to EMIL.
Volvo on its part is demerging the sales and distribution network of Volvo India Pvt. Ltd and will transfer it to the new joint venture EMIL, the spokesman said.
The approval will be subject to compliance with Reserve Bank of India and Securities and Exchange Board of India guidelines, as well as foreign investment norms and the court's approval of the demerger of Volvo India's distribution business, he added.
In May this year, the Foreign Investment Promotion Board (FIPB) had referred this investment proposal to the CCEA as it involved FDI of more than Rs.6 billion.
A Volvo spokesperson had then told the media that the proposed joint venture would have exclusive distribution rights in India for all current and future trucks of AB Volvo.
Reader's comments(1)
1
It would augur well for the logistic companies by bringging on board the very
best in technology. Why in India , we still have barriers for FDI, after all
Volvo would not bring on board tainted money...
In my opinion, after Merc Actros, Volvo makes the best heavy commercial vehicle,
much better than scania or any other jap tin toys.
In long run , maybe Volvo is able to offer the sedan to Indina markets and they
are reputed to make the safest vehicle in the world & I have my opinion on it
that everyone emulates Volvo , including BMW,Merc etc, when it comes to safety.
Indians are not yet used to that kind of features, except in cream de la cream
segments, but Volvo can really help change the lansacpe of auto industry form
the tin toys genre that we have as of now from the japs.
Besides it is also a testimony for the indian manufacturing companies
capabilities.
Let the FDI come freely and it would only augur well for the country by boosting
the multiplier effects.
best in technology. Why in India , we still have barriers for FDI, after all
Volvo would not bring on board tainted money...
In my opinion, after Merc Actros, Volvo makes the best heavy commercial vehicle,
much better than scania or any other jap tin toys.
In long run , maybe Volvo is able to offer the sedan to Indina markets and they
are reputed to make the safest vehicle in the world & I have my opinion on it
that everyone emulates Volvo , including BMW,Merc etc, when it comes to safety.
Indians are not yet used to that kind of features, except in cream de la cream
segments, but Volvo can really help change the lansacpe of auto industry form
the tin toys genre that we have as of now from the japs.
Besides it is also a testimony for the indian manufacturing companies
capabilities.
Let the FDI come freely and it would only augur well for the country by boosting
the multiplier effects.
Posted by:
Rajeev Pandey
- IITs may produce doctors too
- 'Paying much hinder employees' performance'
- Mobile will help maintain workout routine
- U.S. rights body fights Indian guest workers' cause
- NASA successfully tests first deep space Internet
- Indian women more competent than U.S.
- Bangalore's IT, BPO crowd less than 10 percent
- It is raining jobs in India amid global crisis
- Sex lives suffer as Sensex fluctuates
- Television workers get 40 percent hike
- It is raining jobs in India amid global crisis
- Retaining best brains seems effortless for IT firms
- Indian women more competent than U.S.
- Bangalore's IT, BPO crowd less than 10 percent
- NASA successfully tests first deep space Internet
- Nokia Siemens employee dies of eating pastries
- Tech sector may lose 180,000 jobs this year
- IITs may produce doctors too
- Nokia Siemens employee dies of eating pastries
- 'Next terror mail could come from IIM-A'