Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

05May94 SWEDEN: VOLVO REFOCUSES WITH £3BN SALE.

Volvo has announced plans to sell up to SKr40 billion (£3.4 billion) of assets so that it can focus its operations on vehicle production. The move is likely to be good news for the construction equipment, trucks and engines divisions, which have been identified as core businesses for Volvo's future.The Swedish company's incoming chief executive, Soren Gyll, plans to reverse the strategy of his predecessor, Pehr Gyllenhammar.Mr Gyllenhammar wanted to broaden Volvo's holdings in non-automotive businesses to lessen its dependence on the cyclical car and truck markets. But his attempt to merge with French manufacturer Renault failed and he left Volvo.Mr Gyll had told the annual meeting: 'Volvo's operations will be concentrated on passenger cars and trucks and buses, supplemented by marine and industrial engines, aircraft engines and a major stake in construction equipment.'But before further investment in these core businesses can be made Volvo must reduce its £1.2 billion debt.Volvo's disposals, which are to be completed by the end of 1996, include consumer products group BCP and a 28 per cent stake in the pharmaceuticals company Pharmacia. These two sales alone could raise more than £2.5 billion. Analysts predict that Volvo will also sell its 20 per cent stake in Renault.Both Volvo Trucks (GB) and VME Construction Equipment, jointly owned by Volvo and Clark, welcomed the decision.Both companies are enjoying rising demand for machinery in the UK; VME has reported a 20 per cent increase in sales last year compared with 1992. CONSTRUCTION NEWS