U.S.: Volvo must sell Xpeditor line as prelude to Mack merger

WASHINGTON, D.C. (Dec. 27, 2000) — Volvo Trucks has agreed to divest its North American low-cab-forward business after the U.S. Justice Department voiced concerns that a merger with Renault V.I. and its Mack Trucks subsidiary would give the company a monopoly position in the market.

Mack and Volvo’s heavy-duty low COE lines together account for about 86% of the U.S. marketplace, according to government officials. According to a consent decree with the U.S. government, Volvo must divest its low COE line, the Xpeditor, within three months. The vehicle is popular in refuse, concrete pumping, aircraft refueling, and other vocational applications.

The agreement states that if Volvo cannot find a purchaser, a trustee will be appointed to oversee a sale. The trustee would have the discretion to sell either the Volvo or Mack line. Mack produces two heavy-duty COE lines, the MR and the LE.

Volvo notes that the segment amounts to less than 3% of the total heavy truck market in North America.

Volvo has agreed to a proposed consent decree requiring it to before the merger can proceed. Volvo and Renault expect to conclude the transaction by the end of the year.

In April, Volvo and Renault signed a deal for Volvo to buy Renault’s truck operations, Renault V.I./Mack, in exchange for 15% of Volvo’s shares. The agreement was finalized in July. The European Union approved the merger in September, after demanding that Volvo divest its holdings in fellow Swedish truck maker Scania and Renault divest its holdings in a Finnish truck distributor. The last stumbling block was the U.S. antitrust approval.

The acquisition will make Volvo the world’s second-largest manufacturers of heavy trucks. The combined share of the market for heavy trucks in North America is about 24%.