EU Rejects Volvo's Last-Minute Concessions
March 6, 2000
AB Volvo will have to start over again with an entirely new proposal if it wants to change the terms of its plan to buy Swedish truck-making rival Scania, according to Agence France Presse.
The European press was buzzing last week with reports that the European Union Commission, a western European regulatory authority, planned to ask representatives of its 15 member nations to reject the plan due to monopoly concerns. Volvo and Scania had offered to open their service networks to other nameplates and to sell some parts factories; but the Commission said that wasn't enough.
The Financial Times reported that Volvo told the Commission on Saturday it would ship fewer trucks to dealers in order to cut its market share in Sweden and Norway by 15% and its market share in Finland by 10%. But the commission said it would not accept last minute changes.
"Volvo can no longer come with substantial new elements," a spokesman told AFP. In the last month of its inquiry the commission can accept no changes to a project under examination, he explained. A decision on the merger is expected March 23.
"In such a situation, firms can always withdraw their proposal and come back with another one which takes account of our concerns, which happens a lot rather than risk being turned down," he said.