Volvo Aero signs letter of intent to acquire Norsk Jetmotor AS

VOLVO AERO SIGNS LETTER OF INTENT TO ACQUIRE NORSK JETMOTOR AS Volvo Aero has reached an agreement in principle to acquire 67 percent of the Norwegian aircraft engine component manufacturer Norsk Jetmotor, based in Kongsberg. The sellers are the Norwegian state and Kongsberg Group. The other owners of Norsk Jetmotor are the aircraft engine manufacturers Pratt&Whitney of the U.S. , with a 22-percent interest, and Snecma, France, with 11 percent. "Norsk Jetmotor's and Volvo Aero's operations are complementary," says Fred Bodin, president of Volvo Aero. "Consequently, the acquisition strengthens our joint position in the commercial aircraft engine market." "Volvo Aero has presented a good industrial plan and, with it as a base, Volvo Aero will be a strong strategic owner for Norsk Jetmotor," says Jan T Jørgensen, CEO of the Kongsberg Group. Norsk Jetmotor, which anticipates a turn over in 1998 of approximately NOK 750 million, focuses its operations on production of commercial aircraft engine components. Volvo Aero had sales of SEK 7.5 billion in 1997. Operations comprise the development, manufacture and overhaul of military and commercial aircraft engines, development and production of engine components for space rockets and gas turbines and production of automotive components. Volvo Aero is also playing an expanding role in the leasing of aircraft engines and the sale of services related to aviation operations. According to the letter of intent, the final contract is to be signed prior to year-end 1998. October 19, 1998