Volkswagen Group denies possible bid for Paccar

Article by Andrew Christian, on July 6, 2014

Volkswagen Group clarified that has no interest in bidding for American truck-maker Paccar. Analysts have been expecting VW to enter the United States trucks market, either through an acquisition of Paccar or of Navistar International, to be able to compete against current global leaders Daimler and Volvo.

 In a Bernstein Research note published recently, Daimler's commercial vehicle chief Wolfgang Bernhard disclosed that he was informed by "serious, multiple sources" that VW is planning to bid for Paccar in 2015. A VW spokesman dismissed the speculations, calling them "complete rubbish."

According to Daimler spokesman Florian Martens, Bernhard had been asked about consolidation among truck makers, and answered that VW’s interest in Paccar was a widely discussed topic in the industry.

VW Group recently sold EUR2 billion ($2.7 billion) in preferred stock to help finance the takeover of Scania. VW is integrating Scania with MAN and its own commercial-vehicle operations to create a truck division that will rival that of Daimler’s.

VW, however, lacks a presence in North America, since MAN and Scania are both focused on Europe – making a Paccar acquisition logical. Paccar produces Kenworth and Peterbilt trucks in the US and DAF vehicles in Europe.

Bernstein Research analyst Max Warburton remarked that a VW bid for Paccar "would not be a ridiculous move,” since its current truck operations currently all non-NAFTA. He noted that a Paccar acquisition would be expensive, would require a capital increase and may upset investors.

Arndt Ellinghorst, an analyst at ISI Group in London, said in a report that VW may not retain Paccar's operations in Europe due to competition legislation. He said that CNH Industrial is seen as a potential suitor for DAF.

Topics: vw

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