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Navistar mum on Volvo bid
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February 14, 1999: 11:54 a.m. ET
U.S. truck maker won't comment on report it's talking with Swedish firm
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NEW YORK (CNNfn) - U.S. truck and engine maker Navistar International declined to comment Monday on a story saying it is talking with Sweden's Volvo AB about a possible takeover by Volvo.
Senior executives of Volvo are understood to have met with their counterparts at Navistar in recent weeks to discuss a possible transaction, the British newspaper Financial Times reported in Monday's editions.
"It is corporate policy not to comment on rumors and speculation," a spokesman for Chicago-based Navistar said.
If completed, such a deal would double Volvo's market share in the North American truck industry, the report said.
Navistar has shares outstanding worth some $2.3 billion, the report said, suggesting a $3 billion price tag to acquire the entire company.
However, if a purchaser wanted only to take Navistar's heavy truck division, it could reduce the cost substantially.
Navistar also makes medium-duty trucks, school buses and diesel engines. Analysts said Navistar has little overlap with Volvo in Europe, which could make it a decent fit.
Navistar has $1.5 billion in past net operating losses that it can carry forward to reduce future tax bills, but an acquirer would be limited in the amount it could use, analysts said.
In addition to the Navistar talks, Volvo also is exploring an acquisition of Mack Trucks, a Navistar rival that is owned by Renault's RVI commercial vehicles arm, a French company, the FT reported, citing an industry publication, Stark's Component Ledger. RVI has consistently denied any interest in selling Mack.
Volvo reached a deal in January to sell its auto division to Ford Motor Co. of the United States for $6.45 billion. That transaction would give it a sizable war chest to help it bolster its position in is remaining truck-making business.
The Swedish company already has started trying to build its position. In January, it acquired a 12.8 percent stake in its domestic rival Scania and said it will seek a merger of the two firms to create Europe's largest manufacturer of buses and heavy trucks.
That plan has been stymied, however, as Swedish investment group Investor, which owns a 45 percent stake in Scania, said the time is not right to sell the company.
The American depositary receipts of Volvo slipped 11/16 Friday to close at 27-7/16.
Shares of Navistar climbed 2 to 35-1/4 in Friday trade on the New York Stock Exchange. 
-- from staff and wire reports.
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