EU commission stops Volvo's acquisition of Scania

EU COMMISSION STOPS VOLVO'S ACQUISITION OF SCANIA The EU Commission today rejected Volvo's application for competition approval of Volvo's proposed acquisition of Scania. This means that Volvo does not have the possibility to complete the acquisition of Investor's Scania shares and the public offer to Scania's shareholders. "Together with Scania, we had the ambition to build an EU-based company with the best conceivable prospects to compete globally with the large players in the industry. I regret that the EU Commission, through today's decision, is stopping these plans for reasons that seem to go against the basic concept of the common market", says Volvo's CEO Leif Johansson. "Within Volvo, we must look ahead and move onward with the work to strengthen our global competitiveness, which includes continued investment and further development of our other business areas," continued Leif Johansson. Volvo's current holding in Scania, which amounts to 30.6% of the votes and 45.5% of the capital, is not affected directly by the EU Commission's decision. The shares were acquired at an average price of SEK 266 per share, or a total of slightly more than SEK 24 billion. Volvo intends to retain this holding at this time. However, Volvo does not intend to request a position on Scania's Board of Directors. "We will now follow the continuing developments, but in the short term we foresee no need to divest our shares in Scania", says Leif Johansson. The EU Commission's decision means that the intended integration of Volvo and Scania will not be carried out. The companies will now evaluate whether other forms of future cooperation are possible. "It is natural that many questions arise as a result of the EU Commission's decision. However, I hope that there is understanding for the fact that today we do not have definitive answers to all questions. We must now evaluate the other possible alternatives," continued Leif Johansson. Volvo's offer to shareholders in Scania was conditional upon receipt of the necessary approval from the authorities for the acquisition of shares in Scania on terms acceptable to Volvo. As a result of the EU Commission's decision not to approve Volvo's acquisition of Scania, Volvo cannot complete the agreement to acquire Investor's holding in Scania nor the public offer to Scania's shareholders. The shares tendered in the offer will be transferred back to the affected shareholders' VP-accounts as soon as possible, which is expected to occur on March 20, 2000. Additional information will be sent directly to the affected shareholders. March 14, 2000 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/03/14/20000314BIT00800/bit0001.doc http://www.bit.se/bitonline/2000/03/14/20000314BIT00800/bit0002.pdf