(Bloomberg) -- Isuzu Motors Ltd. shares fell the most in four months in Tokyo trading after the company agreed to buy Volvo Group’s UD Trucks unit for about 250 billion yen ($2.3 billion), raising concerns it’s overpaying for the business.
The stock dropped as much as 5.1%, the biggest intraday decline since Aug. 6, to 1,314 yen on Thursday. It was the worst-performing stock on the Nikkei 225 Stock Average.
The offer of “250 billion yen sounds very big,” said Tatsuo Yoshida, a Tokyo-based automotive analyst at Bloomberg Intelligence. “No businessman is a fool, and Isuzu found them valuable. In that sense, it’s almost creepy. I’m wondering how Isuzu sees potential in the business.”
More broadly, the agreement is part of the wave of alliances and consolidation spreading through the auto industry as the rise of electric and autonomous vehicles prompts companies to team up to pool resources and save costs.
Volvo shares gained 3.6% to 155.45 kronor at the close in Stockholm on Wednesday. Both said they expect to complete the deal by the end of next year.
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