Companies have restarted talks over takeover of Volvo
1 February 2009

French car maker Renault has held talks with Ford about a possible purchase of Volvo cars, reports Reuters.

The two companies met last autumn to discuss a possible deal, but apparently the talks ended after the parties failed to agree on the value of the Swedish car maker.

Renault and Ford have held further discussions since then.

Renault and Volvo came very close to merging in late 1993. Opposition from within Volvo and from the Sweden Shareholder’s Association eventually halted the tie-up.

The two companies were seen as a good fit, because Renault’s centre of gravity was in smaller cars, and Volvo’s in larger, more premium-priced, vehicles.

Last autumn’s talks might also explain why Renault suddenly put plans for a new generation of large cars on ice.

If Renault did buy Volvo cars, it would be probably be on the basis that it is absorbed by the French maker, rather than becoming part of the wider Renault-Nissan alliance.

Volvo has just announced losses of $1.5bn in the wake of collapsing sales and it’s thought that Ford (which itself lost $6bn in the fourth quarter of 2008) is keen to shift its subsidiary in exchange for ready cash.

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