Volvo shopping Scania stake

AB Volvo today confirmed that it is holding talks with other truckmakers in an attempt to sell the 45% stake it holds in rival Swedish producer Scania. "Volvo intends to divest its holding in Scania and discussions are being held with a number of industrial buyers," the company said in its full-year report published on Friday. Volvo bought the stake in Scania in 1999, but the European Commission blocked the companies from merging on competition grounds. Volkswagen of Germany, which already effectively controls Scania, has shown little enthusiasm for purchasing the stake. Germany's MAN and Japan's Toyota are also seen as potential buyers. Even if it manages to sell its Scania stake, CEO Lief Johansson said he doesn't see a bright overall outlook for the company, especially for its Volvo Trucks North America unit. Though demand for trucks in the fourth quarter of last year and first quarter of this year was up in the United States, the company confirmed those numbers are skewed because of new emissions rules. "Our major concern is the world economic uncertainty," Volvo said in a statement. "We do not expect a major recovery in North America during the first part of 2003 and Europe is likely to face a continued but not dramatic downturn."

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