Volvo acquires IR's road division

Volvo is to buy Ingersoll Rand's road development division for $A1.625bn ($US1.3bn). Closure of the transaction is expected during the second quarter 2007 and is subject to relevant approvals.

IR, a manufacturer of heavy equipment for road construction and soil compaction, had revenues of $A1.08bn ($US864m) and operating income of $A126m in 2006. Operations also include material handling equipment.

Volvo CEO Leif Johansson said, “This acquisition is strategically important since it will improve our overall competitiveness as a full-range supplier of construction equipment.”

The global market for road construction equipment is about $A5bn ($US4bn) a year and is projected to grow substantially as a result of increased investments in infrastructure globally. Johansson said Volvo CE had a distinct ambition to expand in this market and the acquisition complements current operations by sharply strengthening Volvo's presence in equipment for road construction work.

The acquired business includes a full range of heavy compactors, asphalt pavers and milling machines and provides “favorable growth possibilities.” The acquisition also strengthens Volvo CE's position in the market for materials handling equipment in North America.

In addition, the acquisition includes 20 dealerships in North America and distribution companies in Europe and Russia which will leverage Volvo CE's sales of compact equipment, primarily in North America.

“Strategically, the acquisition of Ingersoll Rand Road Development, fits exceptionally well with Volvo's current operations within motor graders,” said VCE president Tony Helsham.

Ingersoll Rand's division for road development, with headquarters in Shippensburg, Pennsylvania, has about 2100 employees. The operations have manufacturing units in the US, Germany, India and China.

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Volvo acquires IR's road division

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