Volvo sells stake in Renault for pounds 450m
Friday 01 August 1997
Though the share sale had been expected, the Swedish group said the timing was dictated by the recent surge in Renault's share price. Volvo sold the 11.38 per cent shareholding to UBS, the Swiss banking group, for 750m Swedish kroner (pounds 453m), which compares with the stake's book value of pounds 58m.
Leif Johansson, Volvo's president, said the move confirmed the strategy taken by the group's new management since merger talks between the two companies collapsed four years ago. "We decided to take advantage of the rise in the price of the Renault share during 1997, which has been even more pronounced during the past week." Renault shares have risen by more than 40 per cent since the start of the year.
Volvo's long-running links with Renault, which has supplied the Swedish company with engines and other components since the 1970s, culminated in the merger proposals at the end of 1993. The announcement prompted an unprecedented public outcry in Sweden and a shareholder revolt, which led to the resignation of the entire Volvo board, including Pehr Gyllenhammar, the chief executive, weeks later.
Since then the new executive team has steadily reduced Volvo's shareholdings in other businesses, including food and drinks companies, to concentrate on car and lorry manufacturing. Yesterday's sale left just one remaining outside stake, in the drugs empire Pharmacia & Upjohn.
Volvo has also attempted to transform its conservative image, launching sports versions of its saloon range and a new smaller car, which have been well received. Analysts also said the cash raised could be ploughed into acquisitions in Volvo's truck business.
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 British tourists 'murdered' in Thailand: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Vogue under fire for 'Big Booty' article
- 5 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
British tourists 'murdered' in Thailand: Pair's bloodied bodies found naked on Koh Tao beach
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Scottish independence: Police will be on high alert on Friday whatever the result
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...