The Volvo Group has signed an agreement to divest 75.1 percent of the shares in its wholly owned subsidiary WirelessCar to the Volkswagen Group. WirelessCar provides connected vehicle services and solutions to global producers of passenger cars.
The sales price amounts to SEK 1.1 billion (approximately $122 million US). The divestment will, at the time of closing of the transaction, result in a positive impact on operating income of approximately SEK 1.5 billion (about $166 million) and a positive cash flow effect of SEK 1.1 billion. Closing of the transaction is expected during the first half of 2019.
“We are committed to remaining the leader within the field of connectivity and connected services. This agreement will enable us to fully focus our resources and efforts on connected solutions for commercial vehicles,” said Jan Gurander, deputy CEO of the Volvo Group.
WirelessCar has more than 3 million active connected cars across the globe and revenues for 2018 are expected to reach approximately SEK 0.5 billion (approx. $55 million US). WirelessCar is based in Gothenburg, Sweden, with offices in the U.S. and China.
The completion of the transaction is subject to customary authority approvals.