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Volvo AB (VOL)

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Thursday 13 March, 2003

Volvo AB

CORRECTION:

AB VOLVO INTENDS TO MAKE A PUBLIC OFFER FOR BILIA'S TRUCK AND
CONSTRUCTION EQUIPMENT OPERATIONS

AB Volvo plans to make a public offer for Bilia's truck and construction
equipment operations. To streamline its own operations, AB Volvo intends
to exchange its holding of Bilia's automobile operations for Bilia's
truck and construction machinery operations.

Today, the Board of Directors of Bilia announced its intention to
transfer the Bilia truck and construction equipment operations to a
separate company (Kommersiella Fordon AB, KFAB), and subsequently to
propose to the upcoming Annual General Meeting of shareholders that the
company be distributed among the shareholders. Ownership of one share in
Bilia is to entitle the holder to one share in KFAB. The dividend
proposed by the Board of Bilia - SEK 4.25 per Bilia share - remains
valid.

Volvo, with 43% of the capital and voting rights and the largest
shareholder in Bilia, has announced that it intends to propose to the
resulting shareholders in KFAB that they transfer their KFAB shares to
Volvo in return for shares in "the new Bilia"1. Volvo's intention is to
offer three shares in "the new Bilia" for four shares in KFAB, providing
certain conditions are fulfilled.


The projected exchange ratio was established through consensus between
Volvo and the Board of Directors of Bilia.

1 Bilia, after separation of the rights to the distribution of KFAB and
all other distributions relating to the 2002 fiscal year.


This press release may not be distributed to or published in the U.S.,
Australia, Japan, Canada, South Africa or New Zealand, either directly
or indirectly.


Bilia's proposal to spin off KFAB

Today, the Board of Directors of Bilia announced its intention to
propose to the Annual General Meeting of shareholders in Bilia, which is
to be postponed, that the Group be divided into two units - one
containing the operations involving trucks and construction equipment
(KFAB) and the other containing the operations involving automobiles
("the new Bilia"). Bilia's intention is to carry out the division by
transferring all assets, rights and obligations relating to its truck
and construction equipment operations (including the properties used
mainly for these operations) to the newly formed subsidiary KFAB, which
is then to be distributed among Bilia's shareholders, subject to the
approval of the Annual General Meeting. The record day regarding the
distribution of KFAB will be announced on Bilia's notice of the
postponement of the Annual General Meeting.

Volvo's motivation

Bilia is a leading service supplier and dealer for automobiles, trucks
and construction equipment. Bilia operates in the Nordic region and in
about ten other European countries. With 43% of the capital and voting
rights, Volvo is the largest shareholder in Bilia. Volvo's intention
with the planned offer is to exchange its holding in Bilia's automobile
operations for an increased interest in Bilia's truck and construction
equipment operations. This will result in a streamlining and focusing of
Volvo's operations while enabling Volvo to ensure that KFAB's dealership
operations and service centers continue to serve as an example for
Volvo's quality-oriented dealership network. The acquisition of KFAB is
expected to generate synergistic effects regarding both expenses and
revenues. A more detailed description of the synergies will be presented
at a later date.

Description of KFAB

Bilia is to be divided by transferring all assets, rights and
obligations relating to truck and construction equipment operations to a
newly formed subsidiary, KFAB, that will subsequently be distributed
among Bilia's shareholders. The intention is that KFAB will assume most
of Bilia's current net debt, so that "the new Bilia" will have a strong
balance sheet, enabling the company to continue its expansion and
develop its operations. KFAB will have SEK 375 M in shareholders' equity
as of July 1, 2003. For a more detailed description of KFAB, including
preliminary pro forma financial accounts, please refer to the press
release from Bilia.

Declaration of intent

Volvo, which owns approximately 43% of the shares in Bilia, has engaged
in discussions with the Board of Bilia to ascertain the possibility for
Volvo to acquire the operations that are to be distributed among Bilia's
shareholders. These discussions led to a decision by Volvo to issue a
declaration of intent to
the future shareholders in KFAB to offer to acquire all shares in KFAB,
by offering three shares in "the new Bilia" in exchange for four shares
in KFAB.

An offer is expected to be issued when Bilia has completed the transfer
of its truck and construction operations to KFAB in accordance with the
discussions that have taken place and will continue to take place
between Volvo and Bilia, and Volvo has verified this through a due
diligence procedure carried out by Volvo. Volvo's and Bilia's intention
is that these measures will be completed in such time that the offer may
be issued before the upcoming Annual General Meeting of shareholders in
Bilia. A new date for this Meeting is to be announced by Bilia. The
acceptance period is expected to be closed during the first half of
July.

Provided the projected offer is fully accepted, Volvo's ownership in
"the new Bilia" will amount to approximately 132,000 shares,
corresponding to approximately 0.5% of the capital and voting rights in
"the new Bilia." Volvo's projected acquisition of KFAB is expected to
have a marginally positive effect on Volvo's earnings per share. As
established with Bilia's Board of Directors, Volvo has undertaken to
ensure that the shares in KFAB are listed for trading on a Swedish
exchange, authorized marketplace or other organized Swedish market, in
case Volvo's intended offer results in Volvo not becoming owner of more
than 90% of the shares and voting rights in KFAB.

March 13, 2003

For further information, please contact:

Mårten Wikforss, Media Relations, +46-31-66 11 27
Fredrik Brunell, Investor Relations, +46-31-66 11 91
                         

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