Volvo Construction Equipment (Volvo CE) has announced two major strategic moves as part of its global restructuring plan—divesting its majority stake in China-based SDLG and acquiring the retail operations of Swecon in Europe.
In the first move, Volvo CE has signed an agreement to sell its 70% ownership in Shandong Lingong Construction Machinery Co. (SDLG) to a fund predominantly owned by its minority partner, Lingong Group (LGG), for SEK 8 billion (approx. RMB 6 billion). The transaction, expected to close in the second half of 2025 pending regulatory approvals, is projected to generate a positive operating income impact of SEK 1 billion at closing—though currency fluctuations may influence this outcome. A negative tax effect of SEK 1.6 billion is also expected. Volvo CE, which acquired a majority stake in SDLG in 2006, acknowledged the success of the collaboration but noted that both parties now see strategic merit in pursuing independent paths amid evolving market dynamics and the need for technology transformation.
Despite the divestment, China will remain a key market for Volvo CE. The company intends to sharpen its focus on offering premium Volvo-branded products and services to targeted segments such as mining, quarrying, and heavy infrastructure. It will also continue leveraging China as a global hub for production and development, backed by its long-standing excavator facility in Shanghai and recently announced new production lines.
Acquires Swecon
In a parallel development, Volvo CE will acquire Swecon’s operations in Sweden, Germany, and the Baltics—including aftermarket solutions provider Entrack—from Lantmännen for SEK 7 billion. The deal, which is also expected to close in the second half of 2025, will bring around 1,400 employees and a network of sales, rental, and service operations into Volvo CE’s fold. For the full year of 2024, Swecon posted revenues of SEK 10 billion. The acquisition expands Volvo CE’s retail footprint in key European markets, particularly Germany—Europe’s largest construction equipment market—and Sweden, the company's home ground. It also positions Volvo CE to directly manage most of its European business, reinforcing retail operations as a core strategic pillar.
Commenting on the developments, Melker Jernberg, Head of Volvo CE, said, “With growing competition and the industry’s shift towards new technologies, now is the time to re-focus. Exiting SDLG and acquiring Swecon gives us the agility to better engage with customers and lead sustainable transformation in our priority markets.”
Together, these decisions reflect Volvo CE’s intent to streamline its global strategy—focusing on premium solutions in emerging markets like China while deepening its retail engagement in Europe to drive customer satisfaction and long-term competitiveness.
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