...And A Major Divestiture At Volvo
Swedish car company Volvo likes to boast that it's the largest industrial enterprise in the Nordic region, thanks to former Chairman Pehr Gyllenhammar's costly diversification into real estate, cigarettes, food, and drugs. But with Gyllenhammar gone and a new management team on board, Volvo shareholders on Apr. 20 agreed to return the company to its roots as a car manufacturer. By 1996, Volvo will strip itself of all nontransportation assets, leaving only a car, truck, and engine company with about $6 billion in sales--about half of Volvo's former size. On the block is $3.5 billion Branded Consumer Products and a stake in drug company Pharmacia that may fetch as much as $1 billion. Volvo will use proceeds of the sale to build several new car models.