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Ford to Buy Volvo Car Unit

1 February 1999

Ford to Buy Volvo Car Unit

    SOUTHFIELD, Mich.--Jan. 29, 1999--Gary Brown and James Mateyka, vice presidents, A.T. Kearney Automotive, are available for comment on Ford's proposed purchase of Volvo's car unit.
    Following Ford's purchase of Jaguar a few years ago, it continues to collect brands, with Volvo being one of the strongest, best-defined brands in the automotive world.
    Brown or Mateyka can discuss possibilities for collaboration on product development and the potential now of having engines, transmissions and axles jointly developed. They can discuss the benefits of Volvo's consistent design philosophy and very consistent image -- safety and family values.
    Finally, the deal is far from done, needing shareholder approval on both sides. Plus, Volvo is interested in an industrial alliance, and it is always possible another suitor would offer a higher bid. And if the deal is done, there will be a number of post-merger integration issues. Volvo tried to merge with Renault but had a lot of problems, primarily for cultural reasons. It's one thing to put two companies together; it's another to make them work.
    They can also address Volvo's truck business and how it's competing with Mercedes-Benz to be the largest in the world. The cash from this transaction could help Volvo make waves in the worldwide truck business.