International business mergers often fail when one or more government interests in the companies are involved. This seemed to be the case here: "Volvo shareholders are getting cold feet over the anticipated conclusion of plans to merge with Renault. They are concerned that France is unwilling to set a date for privatization of the company. Another concern is the share the French government will have in the company after the merger" ("Back to the way" para 2.) It seems that the actually business entities were compatible. It certainly would have made sense to expand the sales of both Volvo and Renault in areas where they were not dominant, but where existing dealerships for one would now be featuring and servicing the other.
Even as globalization increases, sometimes hurdles appear which are seldom foreseen ahead of time. It was the shareholders and some Volvo executives who scuttled the deal. Whether their problems were financial or xenophobic, it seems they targeted the French government's involvement in Renault: "The dissidents had raised particular objections about the vagueness of the French Government's plans to privatize Renault and France's insistence on retaining a "golden share" that they feared could effectively guarantee French control of the merged enterprise" (Stevenson para 3). It may be over-simplified to argue that the failed merger was due more to personalities involved and some sticking points which could have been cleared up- such as Volvo's being averse to disclosing its profits. But, as to paraphrase an old Shakespearean play: sometimes for want of a nail a whole kingdom was lost. Here, the potentially sixth-largest international automobile company ended in failure..
"Back to the way we were (merger between Renault and Volvo
automobile manufacturers)" The Economist (US) Nov., 1003
Stevenson, Richard W.: "Volvo Abandons Renault Merger" New York
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