AB Volvo of Sweden announced that it has bought the bus division of British Leyland, making the major Scandinavian automaker a leading bus manufacturer in Western Europe. The purchase was announced Wednesday in London and Goteborg, Sweden. Volvo acquired the bus division from Leyland's management, which took over the company from state-owned Rover Group PLC in January 1987. Under the deal, Volvo acquires Leyland's two plants in Farington and Workington in northwestern England with a total of 1,850 employees. The plants make the well-known red double-decker buses. Volvo, Sweden's largest and most profitable industrial company which has diversified into food and trading, has already taken over General Motors Corp.'s truck division. Volvo's latest purchase makes it the world's second- largest bus maker after Daimler-Benz AG of West Germany. Volvo did not disclose the price it paid for Leyland's bus division, which will boost Volvo's bus production by 40 percent, to about 5,500 units a year. Volvo's bus output rose by 16 percent to a record 3,920 units last year, hitting maximum capacity at its main Swedish plant and a smaller facility in Sao Paulo, Brazil. The British bus subsidiary will continue to operate as an independent entity although Volvo plans to build about 1,000 of its own buses at the Leyland plants by 1990, a Volvo spokesman said. Volvo's main markets are Scandinavia, central Europe and South America, while Leyland buses are mostly marketed in Britain and in British Commonwealth countries. Volvo's bus division last year accounted for 2 billion Swedish kronor, around $340 million, or only 2.2 percent of the company's total sales of 92.5 billion kronor, or $15.7 billion. Leyland is expected to show a small profit for 1987 on sales of roughly 1 billion kronor, or about $170 million.
