Official: Vw gets the EU approval to increase its holding in MAN SE

Article by Christian A., on September 27, 2011

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.

Press Release

Volkswagen moves key step closer to integrated commercial vehicles group

The Volkswagen Group has moved a key step closer towards realizing its goal of an integrated commercial vehicles group consisting of MAN, Scania and Volkswagen by the acquisition of the majority shareholding in MAN SE. “This marks the birth of a new top player on the global truck market,” Prof. Dr. Martin Winterkorn, CEO of Volkswagen Aktiengesellschaft, said in Wolfsburg on Wednesday. Following settlement of the mandatory offer, Europe’s largest automaker now holds 55.90 percent of the voting rights and 53.71 percent of the share capital of MAN SE.

In early May 2011, Volkswagen Aktiengesellschaft increased its holdings in ordinary shares in MAN SE from 29.9 percent to 30.47 percent. Due to crossing the threshold of 30 percent of the voting rights in MAN SE, German takeover law required Volkswagen to make a mandatory offer to all shareholders of MAN SE to acquire their shares in MAN SE. Until the end of the acceptance period on June 29, 2011, MAN shareholders had tendered 35,857,607 ordinary shares and 164,613 preference shares into the Volkswagen offer.

Volkswagen, MAN and Scania are convinced of the industrial logic of a closer cooperation. This latest step is expected to generate annual synergies of at least EUR 200 million. Initially, these will relate to procurement activities, followed in the medium and long term by a closer cooperation in research and development as well as production.

CEO Winterkorn again stressed that the brand-specific characteristics and business areas of MAN are to remain unaffected. “That is the basic principle of our successful multi-brand strategy,” Winterkorn said. He also stated that Volkswagen would of course respect existing co-determination and employee rights to the full extent and be supportive of the locations and employees. “Together with the management and employees of MAN and Scania, we want to make the integrated commercial vehicles group a success for all customers and shareholders,” Winterkorn added.

By this closer cooperation, in particular MAN and Scania can further increase their profitability. Volkswagen as the largest shareholder of both companies will benefit from the related value enhancement, as will the other shareholders of MAN and Scania. At the same time Volkswagen is keeping all options open to further shape an integrated commercial vehicles group going forward.

The size of Volkswagen’s participation in Scania also changes as a result of the acquisition of the majority shareholding in MAN: Since the stake in Scania held by MAN is now attributable to Volkswagen, Volkswagen’s shareholding in the Swedish truck maker Scania increases to 89.2 (formerly 71.8) percent of the voting rights and 62.6 (49.3) percent of the share capital.

Important information:

This announcement includes forward-looking statements about Volkswagen Group and MAN Group. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Volkswagen Aktiengesellschaft cautions you that forward-looking statements are not guarantees of the occurrence of such future events or of future performance and that in particular the actual results of operations, financial condition and liquidity, the development of the industry in which Volkswagen Group and MAN Group operate and the outcome or impact of the acquisition on Volkswagen Group and/or MAN Group may differ materially from those made in or suggested by the forward-looking statements contained in this announcement. Any forward-looking statements speak only as at the date of this announcement. Except as required by applicable law, Volkswagen Aktiengesellschaft does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

Topics: vw, man, europe

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