The European Commission pressured Volkswagen AG to drop plans to take control of MAN SE's supervisory board. This is a major setback in the carmaker’s efforts to build Europe's biggest truckmaker.
Volkswagen’s takeover offer for MAN is set to expire on Wednesday. What the carmaker wanted was for several seats on MAN’s board to be taken by its managers during the annual shareholders' meeting of MAN in Munich.
This plan was included in a plan by VW Chairman Ferdinand Piech to create Europe's biggest truck maker through the merging of MAN and Scania AB.
The combined companies are expected to go up against top player Daimler AG and Volvo AB, the next largest rival. However, the European Commission said that VW’s plan to quickly gain control will violate merger rules.
Hence, VW was told that it has to wait for regulatory approval so that VW, MAN and Scania would be able to cooperate with each other more closely. Last Monday, a spokeswoman for EU Competition Commissioner Joaquin Almunia said, "One cannot exercise control ahead of the Commission's decision."
VW said that it aims to withdraw its proposal for the appointments of VW CEO Martin Winterkorn, VW CFO Hans Dieter Poetsch and trucks chief Jochem Heizmann to MAN's board.
VW said that talks are ongoing with the European Commission and that the formal application for merger control clearance may be submitted in the next few weeks.
Last month, VW had launched a low bid that valued MAN at about 13.8 billion euros ($19.5 billion), seeking to increase its stake in the truck manufacturer to 35-40% of voting rights so that it can obtain regulatory approval for MAN and Scania to have a closer cooperation without having to buy the entire company.