VW Buys MAN Stake
October 4, 2006
Volkswagen added that it had no intention of fully acquiring MAN, which has made a hostile bid for Scania, but re-affirmed its belief that an alliance between Scania and MAN should include VW's Brazilian trucking business.
"The investment (in MAN) should allow Volkswagen to secure its strategic interest in the truck sector and should make possible a friendly and jointly developed solution, which achieves maximum synergies," Volkswagen said in a statement.
MAN launched a hostile takeover worth 9.6 billion euro ($12.2 billion) last month for Scania, in which VW holds 34 percent of the voting rights, seeking to create the biggest European truck manufacturer and the third-biggest in the world.
Shares in MAN plunged 6.88 percent to 68.91 euros on the Frankfurt stock exchange in early afternoon trading, while VW shares showed a gain of 1.87 percent to 69.25 euros.
In Sweden, Scania B shares gained 1.19 percent to 341.50 kronor.
Scania welcomes move
VW has urged MAN to drop its hostile approach and said Wednesday that the two management teams should work "in a cooperative environment."
The VW trucking business in Brazil would offer a combined MAN and Scania group a more diversified product range and access to emerging markets, while cooperation between all three companies in the light trucks market would offer higher sales potential, VW said.
VW also said its financial service activities would help boost any MAN-Scania merger.
VW chief executive Bernd Pischetsrieder said in the statement: "Volkswagen has an industrial interest in the truck business, which is already underpinned by our investments in Scania, our Brazilian truck operations and our light truck activities. It is Volkswagen's clear objective not only to guard these interests, but also to strengthen the potential."
Volkswagen said it had acquired the shares in MAN through the stock market.
MAN issued a statement saying it welcomed the step.
"MAN welcomes Volkswagen as a strategic shareholder and views this as a positive step in the context of its offer to acquire Scania," the Munich-based company said.