11.6 bn SEK transferred to Volvo's shareholders following repurchase of shares

11.6 BN SEK TRANSFERRED TO VOLVO'S SHAREHOLDERS FOLLOWING REPURCHASE OF SHARES Volvo has acquired approx. 43.3 million own shares through the repurchase offer that ended June 30, 2000. In total, 11.6 billion SEK is transferred to Volvo's shareholders. After the repurchase, AB Volvo is now in possession of a total of 43,285,237 own shares, of which 13,628,789 are series A shares and 29,656,448 series B shares. Acceptance in the repurchase offer The Board of Directors of AB Volvo decided on May 18, 2000 to acquire a maximum of 10 percent of the total number of shares of Volvo, corresponding to a maximum of 44,152,088 shares, by offering the shareholders of Volvo to sell every tenth share to Volvo for a cash payment of SEK 264 per Series A share and SEK 271 per Series B share. The application period to accept the repurchase offer ended June 30, 2000. Shareholders representing 43,285,237 shares have accepted the repurchase offer, of which 13,628,789 Series A shares and 29,656,448 Series B shares, corresponding to an acceptance level of 98.0% of the share capital and 98.3% of the voting rights. Following completion of the repurchase offer, the number of Volvo shares outstanding will amount to 398,235,648, of which 124,976,156 Series A shares and 273,259,492 Series B shares. In aggregate, 11,634,897,704 SEK will be transferred to Volvo's shareholders. Payment for the repurchased shares is carried out by VPC and is expected to take place on or about July 18, 2000. Commission-free sale In the commission-free sale of sales rights the average sales price amounted to 6.47 SEK per sales right of Series A shares and 6.82 SEK per sales right of Series B shares. Payment for sales rights sold in the commission-free sale was effected on July 3, 2000 to the shareholders concerned. Agreement with Renault In accordance with the Memorandum of Understanding between Volvo and Renault regarding Volvo's acquisition of the shares in Renault VI/Mack in exchange for 15 percent of the shares in Volvo, Volvo intends, when a final agreement with Renault has been entered into and the necessary approvals have been obtained, to transfer 10 percent of the Volvo Series A shares and 10 percent of the Volvo Series B shares as a partial payment to Renault in exchange for 100 percent of the shares in Renault VI/Mack. Since the repurchase offer was not fully accepted, Volvo intends to acquire the remaining shares in the market. Furthermore, Volvo intends to transfer the remaining payment of 5 percent of the shares in Volvo to Renault subsequent to Volvo completing a further repurchase of own shares. Positive tax ruling regarding the repurchase of shares by Volvo The Swedish Council For Advance Tax Rulings has passed a ruling regarding Swedish tax issues related to the Volvo offer to repurchase shares from the shareholders. The Council has confirmed that the separation and receipt of sales rights is not a taxable event for the shareholders in Sweden. Instead, the original tax base for the shares shall be divided between shares and sales rights in the same way as is the case in a redemption of shares where redemption rights are separated. The ruling has however not yet become enforceable since The National Tax Board has brought the ruling under trial by the Supreme Administrative Court. The National Tax Board thereby claims a confirmation of the ruling passed by the Council regarding certain issues related to the determination of tax base. Further information regarding the Supreme Administrative Court's decision and reporting procedures in the tax returns will be provided as soon as possible. Gothenburg, 10 July 2000 For further information, please contact: Jonas Winzell, AB Volvo, Mobile 46-705 591091 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/07/10/20000710BIT00540/bit0001.doc http://www.bit.se/bitonline/2000/07/10/20000710BIT00540/bit0002.pdf