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.Reuse content