VW raises MAN holding as step towards Scania merger

May 9, 2011

, FRANKFURT, May 9 – Europe\’s biggest automaker, Volkswagen, unveiled on Monday plans to advance towards a merger of truck makers MAN and Scania by increasing its holding in MAN to more than 30 percent.

"Volkswagen goes one step further towards an integrated commercial vehicle group consisting of MAN, Scania and Volkswagen," a statement said as the group raised its holding to 30.47 percent from 29.9 percent previously.

In passing the bar of 30 percent, VW must under German law now make an offer for all outstanding shares in MAN, which VW has long seen as a natural partner for the Swedish truck maker Scania.

VW expected to offer 95 euros ($136.80) for ordinary MAN shares, and 60 euros for preference shares, the statement said.

VW also owns 45.66 percent of the shares in Scania, along with 70.94 percent of the voting rights.

MAN owns another 13.35 percent of Scania\’s stock.

Anti-trust restrictions have posed hurdles for a tie-up of heavy vehicle activities from all three brands however, VW noted.

"To enable a more in-depth cooperation among MAN, Scania and Volkswagen, merger control clearance and further increase of Volkswagen’s holding in MAN are required," the statement added.

Last November Scania said it was considering a merger with MAN, while noting "a number of outstanding issues of commercial and legal nature."

Shares in MAN jumped by 2.39 percent to 98.83 euros in afternoon trading on the Frankfurt stock exchange, while VW\’s stock showed a loss of 1.65 percent to 128.25 euros.

The DAX index of German blue-chips was down by 1.05 percent overall.

MAN, which also makes industrial turbines and diesel engines, is battling a corruption scandal linked to a former division that does not make it a very attractive acquisition at present.

VW is also striving to finalise its takeover of Porsche, which is slated to become the group\’s 10th brand once its own legal woes have been resolved.

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