Volvo Aero acquires composite company to develop lighter aircraft engines

Volvo Aero acquires composite company to develop lighter aircraft engines

Volvo Aero has acquired the composite company Applied Composites AB (ACAB) in
Linköping, which currently has approximately 70 employees. The aim of the
acquisition is to use ACAB and its technology to develop and manufacture
aircraft engine components in composite materials, which are significantly
lighter than the comparable parts in metal.

“The acquisition is part of our investment in lightweight technologies, which
will result in reduced fuel consumption and, consequently, lower emissions from
aircraft,” explains Olof Persson, President of Volvo Aero. 

As a consequence of the acquisition, Volvo Aero will invest approximately SEK 50
M in research and development within the area of composites during the next 18
months.

ACAB, which is expected to report sales in 2007 of SEK 110 M and operating
income of SEK 13 M, was founded in 1988 and is a leading company in development
and production of advanced composite products. The company has military and
commercial customers.

Volvo Aero intends to immediately establish a new operation that will develop
and manufacture certain selected aircraft engine components in composite
materials. These components will be significantly lighter than comparable
components in metal and will then significantly influence the fuel consumption
and, thereby its carbon dioxide emissions. 

“Lightweight technology is already one of our focused areas. Our goal is to
become a world leader in lightweight structures. For that reason, it feels
natural that we take this step by utilizing the broad and deep knowledge within
ACAB,” says Olof Persson.  

The new operation at ACAB will start work immediately. As a result, recruitment
of personnel for the development side of the operation will begin at once. 

Torgny Stenholm, who previously held the position of Vice President Space
Markets and Programs at Volvo Aero, has been appointed new President of ACAB.
Torgny Stenholm will assume his position at year-end. Former President Björn
Thundal will be a member of ACAB's Board of Directors.


December 11, 2007 

For more information, please contact Fredrik Fryklund, head of Corporate
Communications at Volvo Aero, +46 703 192396.

Facts about ACAB

Prior to the acquisition, ACAB was owned by Tibia Konsult AB (67%), among other
holders.

The parties have agreed not to disclose the purchase price. The transaction has
a marginal effect on the Volvo Group's profitability, net financial position and
earnings per share.

The acquisition was implemented on December 10. Since then, ACAB is a wholly
owned subsidiary of Volvo Aero. Currently, there are no plans to change the
name.



Volvo Aero develops and manufactures components for aircraft and rocket engines
with a high technology content in cooperation with the world's leading
producers. Volvo Aero offers an extensive range of services, including sales of
spare parts for aircraft engines and aircraft, sales and leasing of aircraft
engines and aircraft, as well as overhaul and repair of aircraft engines. Volvo
Aero is part of the Volvo Group, one of the world's leading manufacturers of
trucks, buses and construction equipment, drive systems for marine and
industrial applications, aerospace components and services. The Group also
provides complete solutions for financing and service.