Volvo Group In Deal With Westport To Form JV; Westport Stock Up In Premarket

(RTTNews) - Swedish commercial vehicle major AB Volvo (VOLVY.PK) announced Monday that it has signed an agreement with Westport Fuel Systems Inc. (WPRT) to establish a joint venture, aiming to reduce CO2 emissions from long haul transport.

In pre-market activity on Nasdaq, Westport Fuel Systems shares were gaining around 6% to trade at $5.90.

The joint venture will accelerate the commercialization and global adoption of Westport's High Pressure Direct Injection or HPDI fuel system technology for long-haul and off-road applications.

The companies earlier had announced Letter of Intent for the formation of a JV. As previously announced, Westport will contribute certain HPDI assets and opportunities, including related fixed assets, intellectual property, and business, into the joint venture.

Volvo Group will acquire a 45% interest in the joint venture for the sum of approximately $28 million, payable upon closing, plus up to an additional $45 million depending on the performance of the joint venture.

The closing of the joint venture is subject to certain closing conditions, including regulatory and government approvals.

It is anticipated that the joint venture will become operational following the formal closing which is expected in the second quarter of 2024.

High Pressure Direct Injection or HPDI is a fuel system technology which can be applied in vehicles with internal combustion engines to replace greenhouse gas-emitting fuels, like diesel, with carbon-neutral or zero-carbon fuels like biogas or hydrogen.