Volvo: Jitters At The AltarAriane Sains
The proposed Volvo-Renault merger has developed engine trouble. The problem: A group of Volvo shareholders objects that the deal favors French-government-owned Renault, which would get 65% of the combined company. The dissidents say that improving fortunes at the once-ailing Swedish outfit entitle it to a bigger share. The much larger Renault also bugs them by insisting on a proviso that allows it to block purchases of more than 10% of the new company's shares.
A showdown is looming at the Volvo stockholders' meeting on Nov. 9. The dissidents control just 29% of the vote, but they're hoping to enlist institutional shareholders, a passive bunch in Sweden. Chances of success? In 1979, similar unrest aborted Volvo's merger with Norwegian oil company Statoil.