Report: Volvo Eyes Navistar

Swedish vehicle maker Volvo AB says it is talking to U.S. truck manufacturer Navistar International Corp. about a possible takeover, the Financial Times reported in Monday's editions.

Senior executives from Volvo have met with officials from Chicago-based Navistar to discuss a buyout offer, the newspaper said, quoting an unnamed source close to the talks.

The report speculated that the deal could be worth at least $3 billion, but added that the price could be substantially lower if Volvo acquired only Navistar's heavy truck operations. The discussions may also lead only to some kind of alliance.

A takeover would more than double Volvo's share of the North American truck market, the report said.

Navistar International, the United States' third-largest heavy truck manufacturer, also makes medium-sized trucks and school buses, and builds diesel engines. It exports trucks and parts to more than 80 dealers in 75 countries and sells its merchandise through about 1,000 dealers in North America.

Roy Wiley, a spokesman at Navistar's Chicago headquarters, declined to comment on the report. "It's our policy not to comment on speculation or rumor," he said.

The latest round of speculation about Volvo buying Navistar began late last month, after automotive group Volvo agreed to sell its car business to Ford Motor Co. for $6.45 billion.

Since Jan. 27, Navistar shares have risen more than 10 percent to a Friday closing price of $35.25, giving Navistar a market value of about $2.3 billion. Shares had jumped as high as $37.25 earlier in the day Friday.

U.S. markets were closed Monday for the Presidents' Day holiday.

Volvo also declined to comment Monday on the Financial Times report.

"We have shown that by taking a stake in Scania we're ready to participate in the restructuring of the industry but I'm not ready to give any details in this specific (Navistar) case," Volvo spokesman Mats Edenborg told Reuters.

Volvo has said it wanted a full merger with Swedish truck rival Scania after it bought 13 percent of shares in the company in January.

But Scania's biggest shareholder, investment group Investor AB, last week dampened speculation about a deal, saying it was not looking for a buyer at the moment.

Besides its well-known car division, Volvo makes trucks, buses, construction equipment and marine and aviation engines. The proposed sale of Volvo's car division to Ford for $6.45 billion is aimed at giving Volvo the resources to concentrate on developing its other divisions.