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. Last Updated: 07/27/2016

Volvo and DaimlerChrysler Quash Merger Rumor




STOCKHOLM, Sweden -- German-U.S. automaker DaimlerChrysler was reported Wednesday to be interested in buying Sweden's Volvo group, but both companies were quick to quash market speculation.


Swedish business newspaper Dagens Industri, citing unidentified sources, said the two companies had been in talks for several months.


It said an offer for Volvo by DaimlerChrysler, which could be in the range of 150 billion to 160 billion Swedish kronor ($17.8 billion to $19.0 billion), would create a global leader in buses and trucks with a market share of up to 30 percent.


Volvo declined to comment.


"I don't want to comment at all. I will just say what I said to Dagens Industri. This is a sector where everyone talks to everyone," Volvo spokesman Per Lojdquist said.


DaimlerChrysler denied the report.


"We are not in talks with Volvo," a DaimlerChrysler spokesman said.


Volvo has made clear its plans to expand its truck, bus and construction equipment units through acquisitions.


Volvo's chief executive Leif Johansson has said he expects a major consolidation in the world's bus and truck industry in the next few years, and Volvo wants to be part of that.


But the company has also been viewed as a takeover target since the sale of its car unit to U.S. automaker Ford Motor Co. in January this year, which left the Swedish group with a 54 billion crown cash pile - and attendant loss of earnings.


Attempts by Volvo to merge with Swedish truck rival Scania have failed with Scania's biggest shareholder, the investment group Investor AB rebuffing all advances.


The Financial Times reported Wednesday that Volkswagen was now showing interest in Scania.


Dagens Industri said Volvo's senior managers, including Johansson and vice presidents Lennart Jeansson and Arne Wittlov, had met leaders of DaimlerChrysler several times this spring.


Dagens Industri said any deal would probably take the form of a stock transaction as was the case when Daimler Benz AG merged with Chrysler Corp. last year to create the world's fifth largest automobile maker in a $42 billion deal.


Volvo's current shareholders could, therefore, become owners of about 14 to 16 percent of DaimlerChrysler.