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Volvo, Investor square off
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February 22, 1999: 12:51 p.m. ET
Companies waging war of words over 'unsuitable' stake in truck maker Scania
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LONDON (CNNfn) - A simmering row broke out Monday as two of Sweden's corporate giants jockeyed for pole position in the world truck and bus industry.
Investor AB, the investment vehicle of the Wallenberg family, Sweden's largest investor, demanded that truck maker AB Volvo sell its minority stake in rival Scania, in which Investor is principal shareholder with 42 percent of the voting stock.
Investor described Volvo's holding as "undesirable" and "unsuitable", and said it "creates negative effects for employees, for customers and for shareholders."
Investor's demand was triggered by a statement by Volvo released earlier Monday, when Volvo pulled out of negotiations between the two companies over Volvo's desire to take over Scania.
Despite breaking off talks with Investor, Volvo made clear it doesn't intend to dispose of its 13 percent holding in Scania. That holding is crucial because it prevents anyone from taking over Scania without Volvo's agreement. Under Swedish law, predators must win control of at least 90 percent of a company's shares, or the bid fails.
"Investor has had discussions with Volvo regarding Scania going back some time now. In these, we have expressed our desire that Volvo should sell its ownership in Scania," said Investor Chief Executive Claes Dahlback. Investor hasn't made clear whether it is willing to buy Volvo's holding.
The result now is a stalemate, with neither side appearing willing to budge.
In Stockholm, Volvo shares slipped 1.5 crowns to 215 crowns. Scania stock fell a similar amount to 169 crowns, while Investor shares rose 1.5 crowns to 340 crowns. 
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Investor
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