The German carmaker made a takeover offer for MAN that expires on Wednesday, had wanted several of its managers to take seats on MAN’s board at the truckmaker’s annual shareholders’ meeting in Munich, Reuters reported.
But the European Commission said VW’s overly hasty grasp for control would breach merger rules and told the carmaker to wait for regulatory approval of closer cooperation of VW, MAN and Scania.
“One cannot exercise control ahead of the Commission’s decision,” a spokeswoman for EU Competition Commissioner Joaquin Almunia told Reuters.
In a statement, VW said it was “engaged in constructive discussions with the EU Commission in order to receive merger control clearance for a closer cooperation between MAN, Scania and Volkswagen”.
“The existing antitrust hurdles currently limit the ability to realise substantial synergies among these companies significantly. Therefore Volkswagen aims to overcome these hurdles.”
Volkswagen said trucks chief Jochem Heizmann, CFO Hans Dieter Pötsch and VW CEO Martin Winterkorn should not become members of the MAN supervisory board of MAN SE until merger control clearance has been obtained and would not be available for election to the board for now.
“In connection with recent media speculation Volkswagen also wants to point out that [it] prior to having obtained merger control clearance does not intend to re-assess the composition of the management board of MAN SE and in particular not to create additional management capacities in the field of procurement.”
Volkswagen instead nominated Thomas Kremer and Ulf Berkenhagen, both current members of the MAN supervisory board, as well as Matthias Bruse.
Reuters noted VW launched a low-ball bid valuing MAN at about EUR13.8bn (US$19.5bn) last month, aiming to raise its stake in the truckmaker to 35-40% of voting rights for now to get regulatory approval for closer cooperation between MAN and Scania without buying the whole company.
“I think the initial rationale behind making the mandatory offer was to reach a level of shareholding which would give them control at the AGM and at the same time clear all the legal hurdles for a future full takeover of MAN in whatever form that may come,” Morgan Stanley analyst Laura Lembke told the news agency. “I think we’re still a little way away from that.”
Eventually, VW envisages saving about EUR400m of costs in procurement, development and production by setting up a combined trucks group, but it has not yet provided details.
MAN chief executive Georg Pachta-Reyhofen said he saw substantial synergies in any cooperation with VW and Scania which will allow the truck maker to expand its range to include vehicles weighing in at less than 7.5 tonnes.
So far, VW has vowed to keep jobs and sites and made vague promises not to touch the “brand characteristics” of MAN and Scania, but analysts expect Piech, who is also chairman of MAN, to soon replace the carrot with the stick.
MAN sees its engines and the passenger cabin falling under its specific “brand characteristics” that should not be mixed with Scania’s, but analysts expect Piech to push for more, Reuters said.
VW, which aims to overtake Toyota as the world’s biggest automaker by 2018, has also been working to fold sports car maker Porsche into its business as a 10th brand and Piech has also set his sights on Alfa Romeo.