Volvo Group signs an option agreement to divest Arquus

Volvo Group has signed an option agreement with John Cockerill Defense which gives the Volvo Group the right to sell Arquus after mandatory consultations with staff representative bodies. The consultations are expected to be finalized in Q1 2024. As a result of the option agreement, the Volvo Group’s operating income will be negatively impacted by approximately SEK 900 M in the fourth quarter of 2023.

Arquus manufactures and sells specially designed vehicles to defense forces and employs about 1,200 employees in France. In 2022, Arquus represented approximately 1 % of Volvo Group revenues.

The negative earnings effect will be reported in the segment Group Functions & Other and will be excluded from adjusted operating income.

If the option is exercised, closing of the divestment will be subject to governmental approvals and other conditions.

“Volvo Group believes that Arquus will have opportunities to develop with a new owner who is focused on further developing the growing business. That’s why we are starting this process together with John Cockerill. The possible decision to sell or not will be taken after the consultation process with the unions.” Claes Eliasson, SVP Media Relations at Volvo Group told Business Review.

Back in 2022, Arquus was planning to build a Sherpa 4×4 armoured vehicles factory in Moreni, Romania, as part of their offer in a tender organized by MApN to equip the Romanian army with armoured and unarmoured 4×4 vehicles.

“Lately more and more countries are asking for local production. We offer the military local production with the capacity to export to other markets. The company is already working with suppliers in Romania – on vehicles sold to Egypt or Indonesia they install ProOptica battle stations made in Romania. Smoke grenade launchers and explosion-proof seats produced in Pitesti are also installed here. After and if we start production here, the idea is to export to other markets.” Said at the time Dan Goran, Arquus’ representative in Romania. “We want to work on the project with Moreni Mechanical Plant. We are already discussing with them for collaboration and to produce there, and there we will also invest in training people and recruiting new employees. More investment is needed in the plant and a specialised workforce needs to be involved. Two vehicles a day should be produced there and the contract would be for five years. We have factories where we produce five a day.”