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VOLVO PENTA AND OUTBOARD MARINE TO FORM JOINT VENTURE; NEW COMPANY TO PRODUCE STERNDRIVES AND INBOARD GASOLINE MARINE ENGINES

 VOLVO PENTA AND OUTBOARD MARINE TO FORM JOINT VENTURE; NEW COMPANY TO PRODUCE STERNDRIVES AND INBOARD GASOLINE MARINE ENGINES
 NEW YORK, June 1 /PRNewswire/ -- AB Volvo Penta of Gothenburg, Sweden and Outboard Marine Corporation of Waukegan, Ill., today signed a letter of intent to form a new company to produce sterndrive and inboard gasoline marine power


systems. The new company, which will be owned 60 percent by Volvo Penta North America, Inc. (VPNA) and 40 percent by Outboard Marine (OMC), will develop and manufacture a new generation of advanced marine propulsion systems, and provide parts and aftermarket service for these and existing products. The jointly-produced products will be used in boats manufactured by OMC companies and will be marketed by Volvo Penta to independent boat manufacturers worldwide under its brand name.
 The new company will acquire the existing OMC production facility in Lexington, Tenn., and will begin to manufacture products to be available beginning with the 1994 model year. Until then, the two companies will continue to produce and distribute their existing product lines. The agreement pertains to sterndrives and inboard gasoline engines and does not include outboard engines.
 Parts and service support for the new products will be available through the dealer networks of both OMC and Volvo Penta. Volvo Penta currently has 4,000 dealers worldwide, of which 1,800 are in the United States, and OMC has 10,000 marine dealers worldwide, including 4,500 sterndrive dealers in North America.
 "This joint venture will provide consumers, marine dealers, and boat manufacturers with more competitive, more efficient and more technologically advanced products," according to Jan Walldorf, president of AB Volvo Penta, and chairman of VPNA. "In addition," he continued, "the expanded service capability offered by OMC and Volvo Penta service networks will benefit customers who currently use Volvo Penta and OMC sterndrive products, as well as future customers who purchase products manufactured by the joint venture."
 "We believe the new company will result in improved manufacturing efficiencies in the production of sterndrive units at the Lexington, Tennessee, facility," stated James C. Chapman, president and chief executive officer of OMC. "This joint venture is a continuation of OMC's program to streamline its operations."
 Both Volvo Penta and OMC emphasized that consummation of the joint venture is not assured, and that the finalization of the joint venture is subject to completion of a formal agreement and the approval of the boards of directors of both parties and various governmental authorities, including the expiration of waiting periods under the Hart- Scott-Rodino Act. The formal agreement is expected to be finalized by the end of June 1992.
 -0- 6/1/92
 /CONTACT: Dave Moody of Volvo Penta, 804-436-5119, or Ronald C. Kuykendall of OMC, 708-689-5642/ CO: AB Volvo Penta; Outboard Marine Corporation ST: New York, Illinois IN: SU: JVN


TQ-SB -- NY001 -- 5513 06/01/92 08:59 EDT
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Publication:PR Newswire
Date:Jun 1, 1992
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