Prospects dim for Volvo-Scania merger approval

STOCKHOLM, Sweden (March 8, 2000) — Volvo AB chairman Leif Johansson said his company would offer no further concessions to quell concerns of the European Commission (EC) that its proposed acquisition of rival Scania AB would create near monopoly conditions in Sweden and a dominant position in Nordic Europe.

The EC will meet on March 14 and is expected to rule on the deal by March 23. The Reuters news agency said an EU source has said that the planned takeover in its present form is likely to be stopped on antitrust grounds.

Hans Westberg, an analyst at den Danske Bank, told Reuters news agency that Volvo wants ot pressure the EC to consider the future political ramifications of its decision.

“Volvo is saying that if the EC blocks this deal it is probably going to block other truck deals, and that will allow the North Americans into the market with their strong currency,’ Westberg said.

If the EC blocks the deal, Volvo may be forced to come up with an alternative strategy, which could include entertaining offers from prospective buyers.

“If such a bid is proposed the board will look at it and see what is best for its shareholders,” Johansson told a news conference. “We never see bids as hostile,” added

PACCAR, Volkswagen, and Fiat were among those opposed to the deal, according to daily Dagens Industri. These firms have also been mentioned by analysts as possible buyers of Volvo. The Financial Times speculated today that Volvo could make a bid to buy Chicago-based International if the Scania deal failed.