In a bid to further integrate Scania into the Volkswagen business, the German car maker is making an offer to buy out the remaining shareholders in the Swedish truck builder. An offer has been publicly made offering a premium of over 50 per cent on the existing share price for any shareholder and amounts to a total spend by VW of $11.75 billion.
Currently VW own 62.6 per cent of Scania shares with 89.2 per cent of voting rights. The deal brokered when these initial shares were purchased included legal restrictions to keep the control of Scania at arms length from the VW owners. The German company now wants to increase the level of integration between itself, Scania and MAN, which it also owns. The statement put out by VW suggests a possible $1.1 billion improvement in profit for the integrated group when compared to the current structure.
“The plan to fully integrate Scania into the Volkswagen Group follows a compelling industrial logic,”said Leif Östling, member of the VW Board of Management responsible for Commercial Vehicles, and former Scania CEO. “It will significantly improve the capabilities, efficiency and flexibility of the commercial vehicles group comprising Scania, MAN and Volkswagen Commercial Vehicles, for example by implementing a common toolkit strategy similar to the one used in our passenger cars.”
The statement from VW insists the Scania structure, both for production and development, will remain largely untouched if these ownership changes take place.
“Volkswagen has a long and successful tradition of carefully integrating strong brands into the Group while safeguarding their identity, their traditions, their unique strengths and a high degree of independence,” said Martin Winterkorn, Chairman of the Board of Management of Volkswagen. “What we have achieved with either Audi or Porsche we will attain with Scania. This means that Sweden, Scania’s locations, and above all the employees of Scania, will play a central and strategic role in the integrated commercial vehicles group.”
Scania shareholders have until April 25 to make up their mind and they have set up a committee to evaluate the offer, as a group, before handing down a decision as to whether they will sell to VW.
The implications of these ownership changes are not likely to have any major impact on the truck offering from either MAN or Scania in Australia, in the short to medium future. The group are heavily involved in the South American truck market where some further integration may take place. The clear distinction between the two heavy duty brands will be maintained to retain market share in the European market. However, a large integrated truck manufacturer, like VW/Scania/MAN may be eying the US truck market, with International Trucks as an obvious takeover target.