Business newspaper Dagens Industri said any deal could result in a new transatlantic vehicle manufacturing giant going under the working name of Mercedes Volvo Buses, Trucks & Heavy Equipment.

Dagens Industri said an offer for Volvo by Daimler-Chrysler is expected to be in the range of 150 billion to 160 billion crowns. This represents a premium of up to 50 per cent. Volvo spokesman Per Lojdquist refused to comment on the report. "I don't want to comment at all. I will just say what I said to Dagens Industri. This is a sector where everyone talks to everyone," he told Reuters.

Volvo sold its car division to US carmaker Ford in January this year but the Swedish group still makes trucks, buses and construction equipment. Dagens Industri said the deal would probably take the form of a stocktransaction as was the case when Daimler Benz AG merged with Chrysler Corp last year to create the world's fifth largest automobile maker in a $ 42 billion deal. Volvo's current shareholders could therefore become owners of about 14-16 per cent of Daimler-Chrysler.

The newspaper said informed, unnamed sources said Volvo's senior managers, including chief executive Leif Johansson and vice presidents Lennart Jeansson and Arne Wittlov have met leaders of Daimler-Chrysler several times this spring.

A merger of Daimler-Chrysler and Volvo would result in the creation of a global leader in both buses and trucks with a market share of up to 30 per cent. Volvo currently has cash reserves of more than 50 billion crowns following the sale of its car division to Ford. Volvo shares closed at 236 crowns on Tuesday.

Now Volkswagen to buy Scania?

FRANKFURT: Europe's biggest car maker Volkswagen AG on Wednesday declined comment on revived speculation it is interested in a takeover of Swedish truck maker Scania."We are not commenting," Wolfsburg-based VW spokesman KurtRippholz said.

The Financial Times reported in its Wednesday edition that VW had appointed US investment bank Salomon Smith Barney to draw up a list of options which could lead to a takeover bid for Scania. Scania and its biggest shareholder Swedish investment group Investor AB also declined comment on the report.

VW said at its annual shareholders' meeting earlier this month that a capital increase endorsed by shareholders could finance plans for it to build up its commercial vehicles division as it hunts for a partner in the truck business. VW shareholders gave nearly unanimous approval to a measure allowing the car maker to raise its basic capital by up to 782 million marks.

VW, which last year snapped up Lamborghini, Bugatti, Rolls-Royce and Bentley in a European automotive buying spree, said it might need to secure its continued growth through further acquisitions.