Volkswagen Group has long wanted to have an integrated commercial vehicles group composed of Volkswagen, Scania, and MAN. The Group however has moved closer to attaining this goal with the purchase of a majority share in MAN SE. Once the mandatory offer has been settled, Volkswagen will own 53.71% of MAN SE’s share capital but have 55.90% of the voting rights. It was back in the early part of May 2011 when Volkswagen Aktiengesellschaft increased the number of ordinary shares it had in MAN SE from 29.9% to 30.47%.
Since this was over the 30% limit of the voting rights, takeover law in Germany compelled the company to make a mandatory offer to all of MAN SE’s shareholders with the intent of buying their shares. The deadline for the acceptance period was June 29, 2011, and by then 35,857,607 ordinary shares were tendered to Volkswagen, in addition to the 164,613 preference shares.
According to Volkswagen Aktiengesellschaft CEO Prof. Dr. Martin Winterkorn, this acquisition signals the start of a new top player when it comes to the global truck market. He said that Volkswagen, as well as Scania and MAN, understands the industrial logic when it comes to closer cooperation. With this latest move, the resulting cooperation is expected to bring in around EUR 200 million per year. It will begin with procurement activities, with the medium and long-term plan that connotes a closer collaboration not only in production but also in research and development.
Both Scania and MAN expect that their respective profitability will increase with this agreement. Of course, since Volkswagen holds the largest share for these two, it will experience the benefits of the related value enhancement, as what the other shareholders of Scania and MAN will get. Even with this, Volkswagen will continue to keep all of its options open in order to shape further this integrated commercial vehicles group moving forward. Because of this purchase, Volkswagen’s share in Scania will change as well considering that the share owned by MAN in Scania is now under Volkswagen.
As such, share capital of Volkswagen in Scania is up to 62.6% from 49.3%, with voting rights also increased to 89.2% from 71.8%. CEO Winterkorn though emphasized that the business areas of MAN, and even characteristics specific to this brand, will still be there. This is also part of the company’s fundamental principle when it comes to a multi-brand strategy. He also gave the assurance that the company would respect the current co-determination and even employee rights to its full extent.
Volkswagen will continue to support employees and locations. CEO Winterkorn ended by saying that working with the employees and management of Scania and MAN, Volkswagen hopes that this integrated commercial vehicles group would result in a success for everyone, from shareholders to customers.