7 August 1999
Sweden’s Volvo AB announced it has agreed to acquire a majority share in rival Swedish truck and bus maker Scania. Volvo would buy a 49.3% stake in Scania that had been owned by Investor AB, Scania's main shareholder. The acquisition, for $7.5 billion (60.7 billion crowns), would create the world's second-largest manufacturer of heavy trucks behind DaimlerChrysler.
Volvo began its negotiations with Investor in January, prior to the sale of its automotive business to Ford, when it bought 13 % of the shares in Scania. After buying Investor's stake in Scania, Volvo would have 49.3% of the company's capital and 69.6% of its votes. Volvo is offering to buy the remainder from Scania's shareholders at a cash price of 315 crowns per share, a premium over Scania's closing share price on Thursday of 244 crowns.
Investor said it would receive up to 13% of the voting rights in Volvo under the agreement, but provided no capital estimates.
The Volvo-Scania group would have 19% of the global heavy truck market, behind DaimlerChrysler's 25%. Its European market share would be 31%, the biggest share ahead of DaimlerChrysler. In 1998, Scania reported sales of $5.6 billion and Volvo's non-passenger car sales were at $10.2 billion. Both companies reported sales increases of around 12% for the first half of 1999.
The merger must be still approved by the European Union.