Industry News
VW investor cautions management on MAN-Scania-VW merger
18th October 2006
Swedish truck maker Scania has distributed a special dividend of SKr. 7bn (€756m) which is thought by some analysts likely to force MAN to raise its last bid for control of the company, while Scania’s CEO Leif Östling has indicated that while MAN and Scania could realise synergies from combining, a merger could also entail risks, including the potential loss of €500m in turnover and market share erosion.
Östling has also voiced criticism of ex-Scania executive and current MAN CEO Håkan Samuelsson’s leadership, in particular of MAN’s acquisition of the loss-making British truck maker ERF, and suggested that a merger of Scania and MAN could lead to the closure of three or four production plants in Germany and the loss of up to 5,000 jobs there.
Meanwhile, the investment groupTweedy Browne, which owns just under 1% of VW's shares, has warned VW’s management board of the risks potentially involved in taking a lead role in a three-way alliance with MAN and Scania; VW is conditionally supportive of MAN’s merger plans, provided they receive Scania shareholders’ majority consent. “VW should concentrate on rehabilitating its core markets and not give away billions for its commercial vehicles operations,” Tom Shrager, partner at the US investment company, told the Focus-Money magazine published today.
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