Hopes of Volvo merger dashed

SHARES OF Swedish vehicle maker, Volvo, slumped five per cent to close at 217 crowns in Stockholm yesterday after the company dashed hopes of an imminent merger with Italian car giant, Fiat.

Volvo said that Fiat was only one of several companies with which discussions were atking place and stressed that the talks were part of a wide-ranging review of options. "What I know is that there are no discussions in the final stage. As far as I know ..nothing concrete has come out" Volvo deputy board member Lars-Erik Berg said.Volvo shares had risen by 40 per cent in recent weeks on the back of takeover rumours, but Berg said that the company has been involved in talks which ranged from co-operation at a failrly low level to major deals.

Elsehwere in Europe auto shares closed weakler erasing the gains that had been acheived on hopes of industry consolidation.