Volvo Acquires 12.85% of Scania
Volvo said it had spent approximately $650 million to buy 12.85% of Scania’s publicly-traded shares. At the same time, it said discussions were underway with Scania’s largest shareholder, AB Investor, to merge the companies.
"The acquisition of shares in Scania is expression of our strong belief in the power created through a potential combination of Scania and Volvo," Leif Johansson, Volvo’s chief executive officer, said. "We believe the combination of Volvo-Scania is a natural and good alternative for the companies’ shareholders, employees and customers."
The word "alternative" is the key, according to John Lawson, an automotive analyst for Salomon Smith Barney in London, who says both Swedish truck builders are prime targets for acquisition themselves. It has been rumored over the last several months that Ford Motor Co. has been in talks with Volvo about buying its car division, and that Germany’s Volkswagen AG has its own ideas about acquiring Scania, which builds only Class 8 trucks. Fiat, which owns the truck builder Iveco, also is rumored to be pursuing Volvo.
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