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Meritor Automotive and Volvo Sign Understanding

11 June 1998

Meritor Automotive and Volvo Sign Understanding Meritor Would Acquire Volvo's Heavy Truck Axle Manufacturing Operations

    TROY, Mich., June 11 -- Meritor Automotive, Inc.
and the Volvo Truck Corporation announced today that they have signed a
memorandum of understanding that would allow Meritor to acquire Volvo's heavy
truck axle manufacturing operations based in Lindesberg, Sweden.  Under the
terms of the proposed agreement, Meritor would become the primary supplier of
heavy duty axles for Volvo's global heavy truck operations.  The companies
added that completion of the transaction would be subject to due diligence,
the execution of a definitive agreement, respective corporate and regulatory
approvals and other customary conditions.
    Meritor Chairman and Chief Executive Officer Larry D. Yost said, "The
acquisition of Volvo's heavy truck axle manufacturing resources would enhance
Meritor's position as a global leader in commercial axle production.  This
major growth opportunity provides premier manufacturing capacity and leverages
our global production volumes."
    Volvo Truck Corporation President, Karl-Erling Trogen added, "The decision
to sell our axle manufacturing capability is based on the belief that Volvo
will be better positioned to serve its end-user customer by teaming with a
company whose core business is axles."
    Volvo is one of the world's leading heavy truck brands.  Worldwide, Volvo
trucks are known for their driver comfort and safety.  Volvo Truck Corporation
employs 22,000 people and has factory facilities in nine countries. The
Lindesberg axle facility employs more than 750 people.  Volvo trucks are
marketed in more than 100 countries.  In total, 660,000 Volvo trucks are today
in useful service all over the world.  During 1997, the company delivered
69,000 trucks.
    Meritor, with 1997 sales of more than $3.3 billion, is a global supplier
of a broad range of components and systems for commercial, specialty and light
vehicles.  Meritor consists of two businesses:  Heavy Vehicle Systems, which
accounted for 59 percent of fiscal year 1997 sales, is a leading supplier of
drivetrain systems and components for medium- and heavy-duty trucks, trailers
and off-highway equipment and specialty vehicles, including military, bus and
coach, and fire and rescue; and Light Vehicle Systems, a major supplier of
roof, door, access control and seat adjusting systems, electric motors and
electronic controls, suspension systems and wheels for passenger cars, light
trucks and sport utility vehicles.