Volvo Breaks Off Scania Talks
Feb. 22, 1999
STOCKHOLM, Sweden (AP) _ Vehicle-maker AB Volvo has broken off talks with the main owner of a rival Swedish truck and bus maker about a merger.
Volvo surprised the Swedish business community in January when it announced that it had acquired 13 percent of the shares in Scania and declared its intention to merge.
But several weeks of talks with Investor AB, which owns 45.5 percent of the shares in Scania, have been ended because ``the conditions for reaching an agreement do not exist at the present time,'' a statement Monday from Volvo said.
``I cannot express an opinion on the conditions for possible future discussions with Investor on this matter, but we are in no hurry,'' said Volvo's Chief Executive Leif Johansson.
Volvo's move for Scania came shortly before Volvo announced the sale of it automobile division to Ford Motor Co. for $6.45 billion. Volvo said selling the small but prestigious car division would allow greater focus on its other businesses, which include trucks, buses, construction equipment and marine and aerospace engines.
Johannson said the halt in talks doesn't mean Volvo has any intention of selling the stake it has acquired in Scania.
``Volvo wanted to ensure that it could participate in the discussions of Scania's future ownership, and we do not intend to sell our holding in Scania, regardless of possible changes in its ownership,'' Johansson said.
Recent reports have said Scania also is seen as a merger target by Volkswagen and Fiat.