FILE PHOTO: The logo of Swedish truck maker Volvo is pictured at the IAA truck show in Hanover, September 22, 2016. REUTERS/Fabian Bimmer/File Photo
BERLIN/STOCKHOLM (Reuters) – Volvo (VOLVb.ST) has agreed to sell 75.1% of WirelessCar, a digital service developer specializing in connected drive, Volkswagen (VW) (VOWG_p.DE) for 1.1 billion Swedish crowns ($121.5 million), the Swedish truckmaker said on Wednesday.
The deal will allow Volvo to concentrate on commercial vehicles, its core business since it sold Volvo Cars in 1999.
Several truck and car manufacturers are shedding assets to the pool of money in the development of costly electric and unmanned vehicles, markets, where they face competition from new entrants, such as Tesla (TSLA.O).
WirelessCar has its own technology, platform and develops digital services, such as billing and security, and emergency repairs of services for customers, including Jaguar Land Rover [TAMOJL.UL], Daimler (DAIGn.DE), Nissan (7201.T) and Volvo Cars [GEELY.UL].
The company has more than 3 million active connected cars around the world and reported a revenue of approximately 500 million kroner in 2018, Volvo said in his statement.
VW said WirelessCar technology would further the goal of developing value-added services for customers by enabling a safe and stable exchange of data between the systems in the cars and a cloud platform it is developing with Microsoft (MSFT.O).
The German car maker added that the deal still had to be approved by the cartel authorities, and that it expects the transaction to close during the first half of the year 2019.
At the conclusion of the sale would result in a positive effect on Volvo’s operating income by about 1.5 billion crowns and the cash flow of 1.1 billion kroner, Volvo said.
Reporting by Tassilo Hummel in Berlin and Esha Vaish in Stockholm; Editing by Maria Sheahan and Edmund Blair