Volvo Group Signs Option Agreement With John Cockerill Defense To Sell Arquus; Expected To Be Finalized In Q1 2024; Operating Income Will Be Negatively Impacted By ~SEK900 Million In Q4 Of 2023
Portfolio Pulse from Benzinga Newsdesk
Volvo Group has entered into an option agreement with John Cockerill Defense to potentially sell its defense vehicle subsidiary, Arquus. The deal is expected to be finalized in Q1 2024 after staff consultations. The agreement will negatively impact Volvo Group's operating income by approximately SEK 900 million in Q4 2023. Arquus contributes about 1% to Volvo Group's revenues and employs around 1,200 people in France. The negative earnings effect will be reported under Group Functions & Other and will not affect adjusted operating income.
January 15, 2024 | 11:28 am
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Volvo Group's operating income is expected to be negatively impacted by SEK 900 million in Q4 2023 due to the option agreement to sell Arquus to John Cockerill Defense. The deal is anticipated to be finalized in Q1 2024.
The negative impact on Volvo Group's operating income due to the option agreement is significant, as it is estimated at SEK 900 million. This is likely to be viewed unfavorably by investors in the short term, potentially leading to a decrease in the stock price. However, the impact is somewhat mitigated by the fact that this will not affect the adjusted operating income and represents a divestment of a subsidiary that accounts for only 1% of the group's revenues.
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IMPORTANCE 70
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