Volvo Makes $497 Million Provision for EU Antitrust ProbeDorothee Tschampa
Volvo AB, the world’s second-largest truckmaker, made a provision of 400 million euros ($497 million) after evaluating a European Commission statement on alleged antitrust breaches.
The provision will hurt fourth-quarter operating income at the trucks division, the Gothenburg, Sweden-based manufacturer said in a statement today.
The EU has been investigating makers of heavy and medium-duty trucks for alleged price fixing since 2011. The investigation also involves Volkswagen AG’s MAN SE, DAF Trucks NV, part of Paccar Inc., and Daimler AG. Fines can be as much as 10 percent of annual revenue for secret deals with rivals to set prices or rig markets.
“The proceedings are still at an early stage and there are a number of uncertainties associated with the final outcome of the commission’s investigation as well as the amount of a potential fine,” Volvo said today.
The truckmaker will re-assess the size of the provisions regularly and Volvo reiterated that it’s “probable that the group’s financial result and cash flow may be materially adversely affected” as a result of the investigation.
Volvo shares rose 0.9 percent to 82.35 kronor at 11:08 a.m. in Stockholm.
Stuttgart, Germany-based Daimler made provisions in 2011 and is examining the amount regularly, Ute Wueest von Vellberg, a company spokeswoman, said by phone today. She declined to comment on the value of the provision. Daimler is evaluating the EU statement of objection, von Vellberg said.
“Fighting cartels will be one of the priorities during my mandate,” the new Competition Commissioner Margrethe Vestager said last week. In March, manufacturers of ball bearings for car and truckmakers were jointly fined 953 million euros.