VW makes €6.7bn bid for full control of Scania
Volkswagen has offered €6.7bn to buy the rest of Swedish truckmaker Scania that it does not already own, as Europe’s largest vehicle manufacturer aims to deeper integrate its commercial vehicle businesses.
The owner of 62.6 per cent of Scania, Volkswagen has long wanted to better integrate the company with MAN, its other truckmaking business, and the offer represents a premium of 57 per cent and 53.3 per cent for Scania’s two classes of shares.
The offer came as Volkswagen announced that full-year profits had halved to €9.1bn, as currency swings hampered earnings, despite a 4.9 per cent increase in sales to 9.73m vehicles.
The German company said greater integration between MAN and Scania would result in synergies of at least €650m in annual operating profit, realised 10 to 15 years after a full buyout.
“With its premium products, its strong market position and its technological expertise, Scania is a core element of the integrated commercial vehicles group that we intend to accomplish under the umbrella of the Volkswagen Group,” Martin Winterkorn, chairman, said.
“This is a key step towards being able to fully exploit the advantages offered by the integrated commercial vehicles group for everyone involved,” Mr Winterkorn added. “We are convinced that it is very attractive for Scania’s shareholders and will create long-term value for Volkswagen.”
Scania’s shares rose this month on reports that Volkswagen, which controls 89 per cent of its voting rights, was considering buying out the company’s minority shareholders.
Volkswagen patriarch Ferdinand Piëch has spent billions of euros building a trucking empire over the past decade in order to challenge Volvo and Daimler for the crown of the world’s largest truckmaker by sales.
But in contrast to VW’s hyper-successful car unit, so far there is precious little to show for its outlay in trucks, with promised synergies of €200m by the end of 2014 – mainly in purchasing – well short of a total of €1bn in truck synergies once touted by Mr Piech.
The deal suggests a new push to achieve those goals, and was announced alongside the appointment of former Daimler executive Andreas Renschler to lead its combined commercial vehicles business from February 2015.
Mr Renschler, who drew plaudits for his management of Daimler’s truck business, was widely expected to make the switch between the great German automotive rivals.
In a year when Volkswagen narrowed the gap in global car sales behind world leader Toyota and second-placed General Motors to just a few thousand vehicles, the company said revenue rose 2.2 per cent to €197bn.
Profit after tax fell by more than half, however, partly due to 2012’s inflated figure on account of its integration of Porsche into the business, the company said.
Volkswagen expects to see a “still challenging market environment” in 2014, and forecast an annual rise or fall in sales by 3 per cent.