Investor AB Comments On Volvo's Ownership in Scania

23 February 1999

Investor AB Comments On Volvo's Ownership in Scania: Undesirable Ownership by Strongest Competitor Obstructs Activites

    STOCKHOLM, Sweden--Feb. 22, 1999--Today, Volvo explained in a press release that it does not have any intention of selling its 13% ownership block of shares in Scania, regardless of eventual ownership changes in Scania. Investor, which is the largest owner in Scania, with 42% of the votes and 26% of the capital, considers the resulting situation unsuitable for Scania.
    "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," says Claes Dahlback, President and Chief Executive Officer of Investor.
    "To have the strongest competitor as one of the largest owners is, in the long run, unsuitable for Scania. It only creates negative effects for employees, for customers and for shareholders," says Dahlback.

Background

    Discussions about possible ownership changes in Scania took a new turn when Volvo's management in mid-January announced that it had acquired 13% of the shares in Scania. At the time, Investor explained that its intention was to find the best future strategy for Scania. "This means that we, very thoroughly and carefully, must look into all conceivable future alternatives for Scania, from being a continuing independent company to various forms of collaboration or merger," Claes Dahlback said in a press release of January 18.
    At Investor's press conference held on February 11 in conjunction with the release of its 1998 earnings report, Investor's Chairman, Percy Barnevik, made this very clear: "As principal owner, we feel that Scania in 5,6,7 years from now can very well stand on its own." At the same time, he added: "But in the long run there will be change in this industry where global volume counts and where you work with platforms and components for America, Europe, Asia and Latin America. And where we feel it can be in Scania's interest for the next generation to be in a constellation with other manufactures. Then, we do not entirely determine ourselves when these types of discussions come up and it is a fact that changes in the industry are happening right now."
    Investor AB is the largest Swedish industrial holding company. It generates value for its shareholders through long-term active ownership, active investment operations and trading. Over the past 25 years the average total annual return to shareholders has exceeded 20%.
    Investor AB owns a portfolio of major holdings in a number of Sweden's largest most internationally active industrial companies. These include Astra, Incentive, Scania, Ericsson, ABB, STORA, Atlas Copco, S-E-Banken, SKF, WM-data, Saab, SAS, OM Gruppen, and Electrolux. Its largest shareholders are the Wallenberg family foundations and a number of mutual and pension funds.
    Investor AB is based in Stockholm, with offices in Hong Kong, London and New York.