Volvo Acquires 12.85% of Scania

PARIS — Volvo Truck Corp. has purchased a minority stake in Scania and has started discussions on a merger with the rival Swedish company that would create the world’s second largest heavy truck builder behind DaimlerChrysler.

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.



"There is kind of deadlock in the consolidation of the European truck manufacturing industry," Mr. Lawson said. "The truck makers are not resisting consolidation. The problem is they all want to be the consolidator."

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