MAN Expected to Sweeten Bid in Battle for Truck Domination
September 19, 2006![](https://static.dw.com/image/2177326_800.webp)
A battle for domination of the European truck building industry began on Monday with a hostile bid by German industrial group MAN for Scania of Sweden worth 9.6 billion euros.
The board of Scania immediately rejected the offer, which would create the biggest truck maker in Europe and the third-biggest in the world.
The terms, in cash and shares, represented a premium of 36 to 39 percent over the recent Scania share price but were also turned down by key Scania shareholders -- the Wallenberg family and German car maker Volkswagen.
MAN chief executive Haakan Samuelsson had said earlier that he was confident of winning round shareholders, which analysts said would require a higher offer price.
"Scania and MAN are two very profitable companies which complement each other ideally in industrial terms," Samuelsson said. "The two groups have comparable structures and the same tradition as far as the work of the engineers is concerned."
He said MAN would operate a "dual brand" strategy after the merger, maintaining Scania as a separate entity with its own research and development team. The two brands would pursue jointly expansion in growing markets such as China.
Will MAN raise offer?
Shares in MAN sank on the Frankfurt stock exchange, closing down 5.30 percent at 60.61 euros. Analysts said the fall was because of fears the German group might be tempted to significantly improve its offer. MAN needs to win 90 percent of the voting rights in Scania for the takeover to succeed.
"People are absolutely speculating on a higher bid. Another conclusion cannot be drawn," said analyst Anders Bruzelius at Swedbank in Stockholm.
The Wallenberg investment group, which controls 29 percent of the company, issued a statement through its Investor subsidiary saying that the offer "did not reflect the fair value and potential of Scania."
Volkswagen, the biggest shareholder in Scania with 34.32 percent of the voting rights and 18.7 percent of the share capital, also rejected the bid. The German group said its stake in the Swedish truck maker was of "strategic character" and that it was not in its "industrial interest" to sell.
MAN said that it had signed an agreement with French group Renault to buy Renault's holding of 2.85 percent in Scania. Renault owns 5.18 percent of the votes in Scania.
MAN would be number two with Scania
DaimlerChrysler is currently the biggest maker of trucks in Europe, followed by the combined businesses of Volvo and Renault, according to data compiled by the ACEA European Automobile Manufacturers Association.
MAN ranks number three, but with Scania it would leapfrog the other two to take the number one spot.
MAN said it hoped to achieve cost savings of at least 500 million euros a year with the full benefits becoming effective three years after a deal. No factory closures were planned.
The headquarters of a merged group would be in Munich in southern Germany, but important management functions would remain in Sweden.
MAN, which makes trucks of more than six tons, employs about 80,000 people and has annual sales of 18.5 billion euros.