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Volvo to divest majority stake in WirelessCar to Volkswagen

AB Volvo is set to sell its 75.1% stake in connected car company WirelessCar to Volkswagen AG for 1.1 billion Swedish kronor.

Volvo said that at deal close, the divestment is expected to result in a positive impact on operating income of about 1.5 billion Swedish kronor and a positive cash flow effect of 1.1 billion Swedish kronor, according to a Dec. 19 news release.

The transaction is expected to close during the first half of 2019, subject to customary regulatory approvals.

Volvo unit WirelessCar provides connected vehicle services and solutions to over 3 million active connected cars worldwide. Volvo said it expects WirelessCar's 2018 revenues to reach about 500 million Swedish kronor.

On Nov. 26, Volvo's parent Geely Automobile Holdings Ltd. said it will team up with China Telecom Corp. Ltd. to develop smart cars and homes and new technology applications.

As of Dec. 18, US $1 was equivalent to 9.07 Swedish kronor.