German truck maker MAN SE’s CEO said an offer from Volkswagen AG to purchase the rest of MAN below the current market value is fair, given the poor economic conditions in Europe, Bloomberg News reported.
“The prospects for the MAN group in 2013 have been affected by the decline in economic growth expectations,” Georg Pachta-Reyhofen said at MAN’s shareholders meeting in Munich on Thursday.
VW gained the approval of MAN’s shareholders’ at the meeting for a “profit-transfer and domination agreement,” which eliminates the need for arm’s length negotiations between the companies and gives the automaker access to MAN’s cash.
The vote was not in doubt because Volkswagen already owns just over 75% of MAN’s voting rights, Bloomberg reported.
VW, which is required under German law to offer to buy out the minority owners, is proposing purchasing MAN’s remaining stock for more than $107 a share.
Closer cooperation is crucial to VW’s effort to jump-start a seven-year effort to forge Europe’s biggest truck making concern comprising MAN, Sweden’s Scania AB and its own commercial vehicles unit, Bloomberg said.
Volkswagen and MAN collectively own 88.3% of Scania, with VW controlling the majority.
