Renault and Volvo 'close to merger'
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Your support makes all the difference.THE FRENCH car maker Renault and Sweden's Volvo are close to a merger, the French daily Liberation reported yesterday.
The accord, which would leave about two-thirds of the new company in French hands with Volvo taking the rest, has been accepted by the French government ministries concerned but is awaiting final approval from the Prime Minister's and President's offices, according to the newspaper. Government officials declined to comment on the report.
Liberation said a sticking point was the place of Volvo's aerospace, food and pharmaceutical interests, which some French officials would prefer to see left out of the reckoning.
The state-owned Renault is on a list of 21 French companies that are to be privatised by the new conservative government.
The privatisation programme is due to start in the autumn, but Liberation said the selling of Renault shares would not start until after its merger with Volvo.
Louis Schweitzer, Renault's president, would be the chief executive of the new company with Pehr Gyllenhammar, of Volvo, chairman of the board, it said.
The two companies have been working together since 1990, sharing purchasing programmes and producing engines for each other's models. An eventual merger has been rumoured for some months as a logical extension of their cooperation programmes.
A suggested outline of the merger drawn up by Liberation had a holding company with 55 per cent of the new company, Renault Volvo SA. An investment company, which Liberation tentatively named Renault Investissement, would own 55 per cent of the holding company with Volvo taking the other 45 per cent.
Renault Investissement would have a direct 35 per cent share in Renault Volvo SA, with Volvo having a similar 10 per cent. Renault Volvo SA would be quoted on the Bourse, it said.
The newspaper said the French state would put its shares in Renault Investissement. It added that the government's aim was to privatise the new company within the next few months.
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