Volvo Talking Merger; Speculation On Effect On Trucks

January 13, 1999

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Sweden’s Volvo confirmed it was talking with Italy’s Fiat and other companies about a possible merger, according to a Reuters news report.

Volvo’s information director, Per Lojdquist, told Reuters that Fiat was one of several companies with which the Swedish group was having discussions, and stressed the talks were part of a wide-ranging review of options.
Other companies that may be talking to Volvo about a merger include Ford and Volkswagen. Ford officials said recently that any talks would only involve the car division. Ford got out of the heavy truck business when it sold its AeroMax, Louisville and Cargo products to Freightliner, and doesn’t plan to get back into it.
Analysts say it’s important for Volvo to keep the quality image associated with its name because it’s crucial for the company’s growing trucks division. Swedish analysts say that means an outright sale of the car division is unlikely. Most say a 50-50 joint venture with a bigger car producer would help Volvo keep on making cars with its image intact, and let the company invest the proceeds of such a deal into its trucks division.

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