Volvo Construction Equipment set to acquire hauler business from Terex

In a move that will improve the company’s penetration in the core earthmoving
segment and extend its presence in light mining, Volvo Construction Equipment
has agreed to acquire the off-highway hauler business of the Terex Corporation
for a purchase consideration of approx. USD 160 M (approx. SEK 1 billion) on a
cash and debt free basis.
Volvo Construction Equipment (Volvo CE) has announced that it has agreed with
the Terex Corporation to acquire the hauler manufacturer Terex Equipment Ltd
including related assets and intellectual property. The deal, which is subject
to regulatory approval, includes the main production facility in Motherwell,
Scotland and two product ranges that offer both rigid and articulated haulers.
It also includes the distribution of haulers in the U.S. as well as a 25.2%
holding in Inner Mongolia North Hauler Joint Stock Co (NHL), which manufactures
and sells rigid haulers under the Terex brand in China. NHL is listed on the
Shanghai Stock Exchange.

Commenting on the rationale of the deal Volvo CE’s president, Pat Olney said:
“This is a strategic acquisition that offers Volvo CE considerable scope for
growth. The addition of a well-respected range of rigid haulers extends the
earthmoving options for customers involved in light mining applications.”

In 2012, the businesses in the acquisition (excluding NHL) had net sales of
approximately USD 370 M (approx. SEK 2.5 billion) and an operating income of
approximately USD 33 M (approx. SEK 220 M). In the first nine months of 2013 net
sales amounted to approximately USD 172 M (approx. SEK 1.1 billion) and
operating income was approximately USD 5.5 M (approx. SEK 35 M). The holding in
NHL will likely be accounted for using the equity method in accordance with IAS
28 (one-line consolidation). The purchase consideration amounts to approx. USD
160 M (approx. SEK 1 billion) on a cash and debt free basis. The acquisition
will increase the Volvo Group Industrial Operation’s net financial debt by SEK
1billion.

The acquisition includes five models of rigid haulers, with proven designs and
payloads ranging from 32 to 91 tons. The introduction of rigid haulers will
extend Volvo CE’s position in light mining; an industry area that is
complementary to general construction, oil & gas, aggregates & quarrying and
road building – segments that Volvo CE is already active in.

The deal also sees a further three models of articulated haulers added to the
Volvo portfolio, with payloads ranging from 25 to 38 tons. These machines
support Volvo CE’s already established position in the articulated hauler
segment, and offer an extensive field population and opportunities for
considerable growth in emerging economies.

If approved, the acquisition adds some 500 employees to Volvo CE’s existing
workforce. It also allows for the continued use of the Terex brand name on the
relevant machines for a transitional period.

The transaction is expected to be finalized during the second quarter of 2014.
For implementation, approval is required from relevant authorities.

December 9, 2013

For further information, please contact

Karin Wik, Volvo Group, tel. +

46 – (0)765 53 10 20
Thorsten Poszwa, Volvo CE, tel. +32 2482 5021

AB Volvo (publ) may be required to disclose the information provided herein
pursuant to the Securities Markets Act and/or the Financial Instruments Trading
Act. The information was submitted for publication at 12.30 p.m December 9 2013