BEIJING, March 26 -- Volvo AB, the world's second-largest truck maker, said it has raised its stake in Nissan Diesel Motor Co to 96 percent to gain a regional brand name and add production in Asia, the world's fastest-growing economic region.

    Volvo, which already owned 19 percent of Nissan Diesel, will spend 7.4 billion kronor (1.1 billion U.S. dollars) on the purchase, Volvo said in a release. Volvo on February 20 offered to pay 540 yen (4.57 U.S. dollars) a share to Nissan Diesel stakeholders between February 21 and March 23, 22 percent more than the share price at the time.

    The maker of Volvo, Mack and Renault brand trucks follows DaimlerChrysler AG, the world's largest truck maker, in buying a Japanese manufacturer to boost output in the region. Volvo's sales in Asia fell last year even as the company sold more trucks in Europe, its biggest market, and in North America.

    "Volvo can make up for its deficiency by buying Nissan Diesel," said Koichi Ogawa, who helps oversee 28 billion U.S. dollars at Daiwa SB Investments Ltd in Tokyo. "Buying a competitor is a good way to expand."

    Gothenburg, Sweden-based Volvo last year sold seven percent of its trucks in Asia. Sales in the region fell 13 percent to 19.7 billion kronor in 2006 from 22.7 billion kronor in 2005, according to data compiled by Bloomberg News.

    Volvo said it plans to apply to delist Nissan Diesel from the Tokyo Stock Exchange, and expects remaining shares in the company to be sold by end of September.

    The takeover also gives Volvo access to pollution-reducing technology from Nissan Diesel, which is subject to some of the world's strictest emissions standards in its home market. Volvo this week said sales in the first two months of the year declined 13 percent, as US deliveries plunged 41 percent after tougher emissions standards made trucks more expensive.

    Leif Johansson, Volvo's chief executive officer, said on February 2 that the truck market in the United States may drop as much as 45 percent in the first half.

    The Swedish truck maker, 20 percent owned by Renault SA, bought a 13 percent stake in Nissan Diesel from Tokyo-based Nissan Motor Co in March last year for 1.5 billion Swedish kronor.

    Raising stake

    Volvo in September spent four billion kronor to raise its stake in Nissan Diesel to 19 percent and to buy 57.5 million preferred shares held by banks.

    The preferred shares, which under Japanese rules carry no voting rights, would be converted into 165.1 million ordinary shares between 2008 and 2014, so that Volvo will own 46.5 percent owner of Nissan Diesel.

    Volvo will assume Nissan Diesel's net interest-bearing debt of 7.5 billion Swedish kronor.

    Stuttgart, Germany-based DaimlerChrysler took control of Mitsubishi Fuso Truck & Bus Corp, Japan's third-largest truck maker, from its former parent Mitsubishi Motors Corp, paying 141 billion yen for a 65 percent stake in 2003 and 2004. It gained another 20 percent in 2005.

    Nissan Diesel and Volvo estimated in November that their alliance would boost combined profit by 200 million euros (265 million U.S. dollars) a year within five years.

    The firms agreed to share sales networks in Japan, China and North America.

    (Source: Shanghai Daily)