Truck Fusion
October 9, 2006
Munich-based MAN AG, one of Europe's leading commercial vehicles manufacturers, is expected to drop its hostile 9.6 billion euro ($12.2 billion) bid for the Swedish truck maker Scania, increasing the chances for an amicable three-way alliance headed by Volkswagen, which is a large shareholder in both companies.
MAN, which has recently transformed itself from a widely diversified conglomerate to focus on trucks, diesel engines and turbo systems, had launched its bid two weeks ago and announced last week that it hoped Scania would enter friendly talks.
For its part, Scania would not comment on the possible tie-up and halted trading in Stockholm early Monday morning.
Workers at MAN threaten protests
Lothar Pohlmann, deputy chairman of MAN the supervisory board, also did not comment on the alliance rumors, but told the Frankfurter Allgemeine Sonntagszeitung he opposed any VW plan to break up the industrial conglomerate, whose manufacturing base is in Germany's Ruhr region. Pohlmann added that MAN employees would not permit such a move.
Worker representatives at MAN threatened to stage large-scale protests against Volkswagen, which owns a 15-percent stake in the company. Pohlmann, who also heads MAN's worker's council, told the mass circulation Bild am Sonntag that employees were worried about job cuts as a result of the merger.
"We cannot allow VW to pick the raisins out of MAN, and scrupulously destroy the company," Pohlmann told the paper.
VW wants to create trucking synergies
Volkswagen said it wants to create use the three-way fusion to create synergies in its trucking operations. MAN is Europe's third largest manufacturer of commercial vehicles, followed by Scania.
Pischetsrieder told the Financial Times he favored all three companies sitting down together in a friendly fashion to discuss the best way to cooperate.