VW Buys Control of Scania; MAN Merger Could Follow
By Dan Leone, Staff Reporter
This story appears in the March 10 print edition of Transport Topics.
Volkswagen AG last week bought a controlling share in Swedish truck maker Scania AB, possibly clearing the way for a three-way merger with German truck maker MAN AG, a combination that would create Europe’s largest heavy-truck producer.
Volkswagen, the largest shareholder in MAN, with 29.9% of the company’s stock, announced March 3 that it paid about $4.37 billion to increase its share of Scania’s voting rights to 68.6%. Volkswagen invested heavily in MAN as that company tried unsuccessfully to acquire Scania in 2006.
A combination of MAN, Scania and Volkswagen would create Europe’s largest heavy-truck manufacturer, eclipsing Daimler Trucks and Volvo AB.
“We welcome the move from Volkswagen, because we see improved possibilities to form a combination” with Scania and Volkswagen’s heavy-duty truck operations, Andreas Lampersbach, a MAN spokesman, told Transport Topics March 6.
Automaker Volkswagen, Wolfsburg, Germany, also makes heavy- and medium-duty trucks, although it doesn’t sell trucks in the United States or Canada.
MAN owns a 17% stake in Scania and has been angling for a combination of the two companies since late 2006, when it launched a takeover bid for Scania that ultimately failed.
However, representatives of Volkswagen and Scania said there are currently no plans to forge ties with MAN.
“There will be synergies be-tween Scania and Volkswagen, but we don’t plan to take over MAN, or to fuse [a combined] MAN/Scania and the Volkswagen truck business,” a Volkswagen spokesman said in a phone interview.
Chris Brady, president of market research group Commercial Motor Vehicles Consulting in New York state, said an alliance of the three truck-manufacturing enterprises was probable.
“In the future, you’ll see the consolidation of MAN, Scania and Volkswagen’s truck making,” Brady said, though he added that the final form of such a combination would depend on whether Porsche SE completes its planned takeover of Volkswagen, which also was announced March 3. Automaker Porsche doesn’t make trucks.
“Volkswagen, especially if Por-sche takes it over, will have the mentality of a car company [and] that could mean spinning off the truck units as a separate entity,” Brady said.
Scania spokesman Hans-Ake Danielsson, when asked whether the Volkswagen takeover would lead to an alliance with MAN or a foray into the U.S. heavy-duty market, told TT, “According to what [Volkswagen] CEO Martin Winterkorn said last Monday, when the deal was presented, the answer . . . is no.”
Currently, MAN and Scania produce trucks mostly for European markets, although Scania also has a presence in Latin America. Volkswagen’s heavy-duty truck operations are in Brazil.
None of the three currently sells trucks in the United States, al-though MAN has a joint venture with Navistar Corp.’s International Truck and Engine subsidiary to produce engines for the North American market.
MAN, however, has previously hinted that it is interested in doing business in North America.
“We definitely think about the North American market,” An-ton Weinmann, head of MAN’s truck business, told TT around the same time the company made its initial bid for Scania (10-2-06, p. 1).
About 76% of Scania’s sales in 2007 came from Europe, according to the company’s most recent financial statement. Latin America accounted for the next largest source of sales at about 13%.
MAN said in its 2007 earnings report that about 74% of its total sales came from Europe last year. Another sizable chunk, about 15%, came from Asia.
Both companies saw their 2007 earnings rise and noted that truck demand remained strong in Western Europe and surged in Eastern and Central Europe.
Scania said that its net earnings in 2007 rose 44% to 8.5 billion Swedish kroner, or about $1.4 billion. Also in 2007, Scania said that orders in Eastern Europe rose by 49% to 17,216. Orders in Western Europe rose 25% to 48,343.
Man also reported improved earnings in 2007, with net income rising 32% to 1.23 billion euros, or about $1.9 billion for the year.
Besides their commercial truck units, both Scania and MAN manufacture diesel en-gines for industrial and marine applications.
Staff Reporter Frederick Kiel contributed to this report.
This story appears in the March 10 print edition of Transport Topics.
Volkswagen AG last week bought a controlling share in Swedish truck maker Scania AB, possibly clearing the way for a three-way merger with German truck maker MAN AG, a combination that would create Europe’s largest heavy-truck producer.
Volkswagen, the largest shareholder in MAN, with 29.9% of the company’s stock, announced March 3 that it paid about $4.37 billion to increase its share of Scania’s voting rights to 68.6%. Volkswagen invested heavily in MAN as that company tried unsuccessfully to acquire Scania in 2006.
A combination of MAN, Scania and Volkswagen would create Europe’s largest heavy-truck manufacturer, eclipsing Daimler Trucks and Volvo AB.
“We welcome the move from Volkswagen, because we see improved possibilities to form a combination” with Scania and Volkswagen’s heavy-duty truck operations, Andreas Lampersbach, a MAN spokesman, told Transport Topics March 6.
Automaker Volkswagen, Wolfsburg, Germany, also makes heavy- and medium-duty trucks, although it doesn’t sell trucks in the United States or Canada.
MAN owns a 17% stake in Scania and has been angling for a combination of the two companies since late 2006, when it launched a takeover bid for Scania that ultimately failed.
However, representatives of Volkswagen and Scania said there are currently no plans to forge ties with MAN.
“There will be synergies be-tween Scania and Volkswagen, but we don’t plan to take over MAN, or to fuse [a combined] MAN/Scania and the Volkswagen truck business,” a Volkswagen spokesman said in a phone interview.
Chris Brady, president of market research group Commercial Motor Vehicles Consulting in New York state, said an alliance of the three truck-manufacturing enterprises was probable.
“In the future, you’ll see the consolidation of MAN, Scania and Volkswagen’s truck making,” Brady said, though he added that the final form of such a combination would depend on whether Porsche SE completes its planned takeover of Volkswagen, which also was announced March 3. Automaker Porsche doesn’t make trucks.
“Volkswagen, especially if Por-sche takes it over, will have the mentality of a car company [and] that could mean spinning off the truck units as a separate entity,” Brady said.
Scania spokesman Hans-Ake Danielsson, when asked whether the Volkswagen takeover would lead to an alliance with MAN or a foray into the U.S. heavy-duty market, told TT, “According to what [Volkswagen] CEO Martin Winterkorn said last Monday, when the deal was presented, the answer . . . is no.”
Currently, MAN and Scania produce trucks mostly for European markets, although Scania also has a presence in Latin America. Volkswagen’s heavy-duty truck operations are in Brazil.
None of the three currently sells trucks in the United States, al-though MAN has a joint venture with Navistar Corp.’s International Truck and Engine subsidiary to produce engines for the North American market.
MAN, however, has previously hinted that it is interested in doing business in North America.
“We definitely think about the North American market,” An-ton Weinmann, head of MAN’s truck business, told TT around the same time the company made its initial bid for Scania (10-2-06, p. 1).
About 76% of Scania’s sales in 2007 came from Europe, according to the company’s most recent financial statement. Latin America accounted for the next largest source of sales at about 13%.
MAN said in its 2007 earnings report that about 74% of its total sales came from Europe last year. Another sizable chunk, about 15%, came from Asia.
Both companies saw their 2007 earnings rise and noted that truck demand remained strong in Western Europe and surged in Eastern and Central Europe.
Scania said that its net earnings in 2007 rose 44% to 8.5 billion Swedish kroner, or about $1.4 billion. Also in 2007, Scania said that orders in Eastern Europe rose by 49% to 17,216. Orders in Western Europe rose 25% to 48,343.
Man also reported improved earnings in 2007, with net income rising 32% to 1.23 billion euros, or about $1.9 billion for the year.
Besides their commercial truck units, both Scania and MAN manufacture diesel en-gines for industrial and marine applications.
Staff Reporter Frederick Kiel contributed to this report.
