Merger Plans Abandoned
January 23, 2007
After a board meeting, Munich-based MAN said a merger with Scania was not achievable with the bid in its present form. Swedish stock exchange regulators must concur before the takeover offer becomes void.
Both Scania and its main Swedish stakeholder Investor AB welcomed the announcement by MAN.
Last year, MAN bid 10.3 billion euros ($13.3 billion) for the Swedish group, saying a merged company would be a European champion of truck making. It obtained about 15 per cent of Scania, but Investor flatly refused the offer.
An unacceptable offer
Volkswagen of Germany, which controls 34 percent of Scania voting rights and 20 percent of Scania equity, confirmed earlier this month that the terms of the MAN offer were unacceptable, though it called on both sides to discuss merger alternatives.
"We welcome the decision," Scania spokeswoman Cecilia Edstrom said, noting that more than 60 percent of Scania shareholders had opposed the bid.
Edstrom said that it remained to be seen if there were grounds for a friendly combination of MAN, Scania and Volkswagen Heavy Trucks as MAN said in its statement.
Edstrom noted that Scania's board had not opposed reviewing industrial combinations in the long-term.
A future partnership?
Investor with some 20 per cent of Scania also welcomed the decision, saying in a statement that it would "continue to support Scania's successful development as a stand-alone company, but we will naturally evaluate possible industrial partnerships and combinations in order to develop Scania further.
"Amicable discussions with MAN and VW are a priority. The lapse of the bid provides an opportunity to do so without time pressure," the statement said.
Investor AB and the Wallenberg foundation, with a combined stake of 30.06 percent of voting rights, are closely linked to the influential Swedish Wallenberg family.