Renault discounts Swedish delay over Volvo deal

RENAULT, the French car maker, which plans to merge with Volvo of Sweden, said yesterday that it was unconcerned about Volvo's decision to delay a shareholder meeting to approve the deal, writes Mary Fagan.

The Volvo board postponed the meeting from 9 November to 7 December because of criticism from shareholders and others opposing the merger.

Soren Gyll, Volvo's chief executive, said: 'We have been influenced by the intensive debate that has been conducted recently and are taking the criticisms that have been advanced with great seriousness.'

Opponents of the deal include the Swedish small shareholders association, some institutional shareholders, trade unionists and academics. There are uncertainties over the valuation of the deal, which would give Volvo 35 per cent of the joint company.

Critics also say that there are no guarantees that the French government will proceed with the privatisation of Renault by 1995. A further cause for concern is the French authorities' decision to retain a golden share in Renault-Volvo, which would give the government the right of veto over shareholdings above 20 per cent. One analyst said that there was a worry that the French government could in certain circumstances in future require Volvo to sell part of its stake.

Renault said that it did not regard the developments in Sweden as a serious threat to the merger, and fully understood Volvo's desire to clarify certain details before asking shareholders for their approval. A spokeswoman said Renault was not worried that the delay would affect the timing of the merger, planned for January next year.

The Swedish Shareholders Association, which sparked a public debate when it attacked the deal, plans to continue its campaign to gather proxies from smaller shareholders to build up a strong 'no' vote.