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The deal will allow Volvo to focus on commercial vehicles, its
core business since it sold Volvo Cars in 1999.
Several truck and carmakers have been shedding assets to pool
money into developing expensive electrical and driverless
vehicles, markets where they face competition from new entrants
such as Tesla <TSLA.O>.
WirelessCar has its own technology platform and develops digital
services like billing and safety and emergency breakdown
services for customers including Jaguar Land Rover [TAMOJL.UL],
Daimler <DAIGn.DE>, Nissan <7201.T> and Volvo Cars [GEELY.UL].
The company has more than 3 million active connected cars across
the globe and is expected to report revenues of about 500
million crowns in 2018, Volvo said in its statement.
VW said WirelessCar technology would further its goal of
developing value-added services for customers by enabling safe
and stable data exchange between operating systems in its cars
and a cloud platform it is developing with Microsoft <MSFT.O>.
The German carmaker added that the deal still had to be approved
by cartel authorities and that it expected the transaction to
close during the first half of 2019.
On closing, the divestment would result in a positive impact on
Volvo's operating income of about 1.5 billion crowns and on cash
flow of 1.1 billion crowns, Volvo said.
(Reporting by Tassilo Hummel in Berlin and Esha Vaish in
Stockholm; Editing by Maria Sheahan and Edmund Blair)
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