Sweden's Volvo AB has made a 1.07-billion- dollar offer to take over Nissan Diesel Motor Co as part of a move to increase sales in Japan and other parts of Asia, the companies announced Tuesday.

Europe's second-largest truckmaker already owns 19 per cent of Nissan Diesel and has offered to buy the rest by paying stockholders 540 yen (4.52 dollars) per share in a deal worth 127.83 billion yen as it seeks to expand into fast-growing Asia.

The Volvo group, which does not include the Ford-owned car division, offered a price that was 22 per cent higher than Nissan Diesel's closing price Monday of 443 yen on the Tokyo Stock Exchange. Nissan Diesel shares were not trading Tuesday because buy bids far exceeded sell offers.

A statement from Nissan Diesel said its board of directors unanimously approved the offer.

The deal hinges on approval from regulatory authorities.

Volvo's share price increased some 1.9 per cent on the Stockholm stock exchange in morning trading.

Venture capitalist Christer Gardell, who owns some 5 per cent of Volvo and last year made headlines after calling for bigger dividends to shareholders, welcomed the move.

"This is financially correct and also strategically correct," Gardell told the online edition of financial daily Dagens Industri. "It strengthens Volvo in Asia and is good for business."

Volvo Chief Executive Leif Johansson said Volvo could afford the deal and go ahead with its earlier announced plan to increase dividends.

"Nissan Diesel has a solid position in Japan and the rest of Asia, where the Volvo Group foresees substantial growth potential," Johansson said in a statement.

The deal would also help the Gothenburg, Sweden-based company to produce more environmentally friendly trucks by gaining access to the Japanese company's expertise in hybrid technology.

Blue-collar unions at Volvo in Gothenburg also backed the deal, citing it would likely increase production of engines at Swedish plants.

Volvo's offer follows another European truckmaker's purchase of a Japanese counterpart after the world's largest truckmaker, Germany's DaimlerChrysler AG, took control of Mitsubishi Fuso Truck and Bus Corp from Mitsubishi Motors Corp, buying a 65-per-cent stake for 1.2 billion dollars in 2003 and 2004 and then a 20-per-cent stake in 2005.

?© 2007 DPA

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