STOCKHOLM, Sweden (AP) _ Volvo and Renault are expected to announce Monday that they will merge, creating the world's sixth-largest automaker.

The two companies have cooperated on purchasing and development for more than 3 1/2 years and own large portions of each other's stock. A full merger has been expected for more than a year.

The companies scheduled a news conference Monday afternoon in Paris. Several newspapers in France and Sweden reported Sunday that the merger was imminent.

Swedish television quoted sources close to President Francois Mitterrand of France as saying the announcement awaited only final clearance from the French government, which owns Renault.

France's industry minister, Gerard Longuet, hailed the impending merger.

Executives for Volvo declined comment and a spokesman for Renault could not be reached Sunday.

Analysts noted the companies have complementary products and markets.

Stockholm-based Volvo's sedans and station wagons, known for their boxy style and safety, are aimed at a narrow, generally affluent market and are popular in northern Europe.

Renault, meanwhile, makes a broader range of automobiles with mass market appeal and is stronger than Volvo in southern Europe.

Volvo's top North American executive, Mats Ola Palm, said Sunday he could not confirm a merger would be announced Monday. But he said the 439 Volvo dealerships in the United States and Canada would not be directly affected by a merger because Renault does not serve the region.

But he added consumers eventually would see lower costs from development and production savings.

About 80,000 of Volvo's 320,000 annual unit sales are in the United States and Canada.

The combined Volvo and Renault would have annual revenue of about $38 billion and sell just over 2 million cars per year. Only General Motors, Ford, Toyota, Volkswagen and Nissan would be larger.

Renault is one of the healthiest automakers in Europe, earning $1 billion on sales of $26.7 billion in 1992. The company turned around years of losses with a bailout from the French government in 1986.

Volvo lost $435 million last year but earned $5.59 million during the first half of this year.

Renault would own 65 percent of the combined entity but Volvo would retain veto power on major strategic decisions, according to news accounts.

The French newspaper Liberation and Swedish newspaper Aftonbladet reported that the combined companies would probably be based in a third country, possibly the Netherlands.

Aftonbladet said Volvo's chairman, Pehr G. Gyllenhammar, would be made chairman of the new company, while Renault chairman Louis Schweitzer, serving as executive director, would have control through majority ownership.