Volvo selling remaining stake in Eicher for $278 million

HONG KONG/MUMBAI (Reuters) - Sweden's Volvo AB is selling 1 million shares in Indian auto firm Eicher Motors in a deal valued at $278 million, according to a term sheet seen by IFR.

Volvo is offering 1,00,5610 shares in a price range of 17,190-18,190 rupees in an open market sale that would result in the Swedish truck maker exiting its investment in Eicher.

Eicher shares closed at 18,191.15 on Wednesday.

A Volvo spokeswoman and Eicher spokesman declined to comment.

In March, Volvo had sold 1.27 million Eicher shares for around 2.5 billion Swedish crowns ($296.05 million).

Sweden's Volvo is under pressure to demonstrate the benefits of years of cost cuts and has in addition to major staff cuts also sold off non-core assets in recent years, including its aerospace division in 2012.

 

Volvo bought the stake in Eicher in 2008 as part of a deal under which the Swedish company also set up a separate truck and bus making joint venture with Eicher in India.

(Reporting by Fiona Lau for IFR in Hong Kong; Additional reporting by Johannes Hellstrom in Stockholm and Aditi Shah in New Delhi, editing by David Evans)