Scania’s two largest shareholders, Volkswagen AG and Investor, are planning to work together on their response to MAN’s expected takeover offer for the Swedish truck manufacturer, according to dpa-AFX news, which has contacts at German banks.

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Volkswagen may consider bringing its Brazilian truck activities into the business and becoming a major shareholder in a new MAN/Scania group.


Volkswagen would not comment on any speculation, but Scania’s management is considered to be open to a three-way alliance.


Volkswagen holds 34% of the voting rights in Scania, while Investor 19.3% voting rights.


Investor would likely be looking for a cash settlement for its stake in the company (10.8% of the capital), while Volkswagen appears to be holding out for an improvement of its position in the global truck market.

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Volkswagen has a very successful heavy truck operation in Brazil, but it is absent from the sector elsewhere in the world, other than through its shareholding in Scania. Scania only operates at the top end of the heavy vehicle market and there would be some synergies with Volkswagen in Latin America. MAN is largely absent from the Latin American market.


 


Latin America: Top 10 Heavy Commercial Vehicle Manufacturers (over 3.5 tonnes GVW, including buses), 2005


Manufacturer  2005 production (units)
 
DaimlerChrysler           88,342
 
Volkswagen                 41,724
 
Ford                            31,286
 
Navistar                       27,717
 
Scania                          16,539
 
Kenworth                     10,474
 
Volvo                           10,300
 
Iveco                             7,855
 
Agrale                            4,966
 
General Motors              2,991
 


Source: Business Monitor International


 


There is no indication at present that Volkswagen’s European light and medium truck business would be included in any alliance. Both Scania and MAN are focused on heavy trucks. However, MAN and Volkswagen have cooperated in the past to produce light commercial vehicles and some MAN dealers in Germany do also sell Volkswagen light and medium trucks.


One Swedish press report has said that Scania CEO Leif Östling would be against a three-way alliance, although he would like to see Volkswagen’s Brazilian trucks operations brought into a Scania-MAN alliance. Indeed without the Brazilian trucks he would oppose a takeover by MAN.


Dpa-AFX notes that should the Scania takeover fail, MAN would consider taking over another competitor, possibly Navistar. MAN and Navistar already cooperate on transmission development.