VW dangles EUR6.7 billion to buy out other Scania shareholders

Article by Christian A., on February 27, 2014

Volkswagen AG is offering EUR6.7 billion ($9.2 billion) to acquire the remaining stake in truck maker Scania AB that it does not own as it seeks to deepen cooperation with its other commercial-vehicles units. Volkswagen already holds a majority stake in Scania as well as 89.2 percent of the voting rights.

The German carmaker is offering SEK200 ($30.6) per share, which is 36 percent higher than Friday’s closing price of SEK147.50 for Scania’s B stock. VW is seeking to finally be able to align Scania closer to its own commercial-vehicles business and truck maker MAN SE, targeting annual operating profit synergies of EUR650 million from joint projects between them.

VW has faced resistance from Scania's minor shareholders, who earlier this month requested for an independent auditor to determine whether ownership of the company by VW and MAN could mean a conflict of interest.

"It definitely makes sense to invest this money to remove the last hurdles for closer cooperation and reap the planned cost synergies," said Frank Schwope, an analyst with NordLB.

VW has enough funds to make the offer, having net liquidity EUR16.7 billion at the end of 2013 after raising EUR3.7 billion selling bonds convertible to preferred shares.

VW is planning to raise an additional EUR2 billion in funding by selling new preferred shares and by issuing hybrid capital. With Scania's shares surging 7.4 percent in the last 12 months, the Swedish truck maker is now valued at SEK116.8 billion.

According to VW, the offer is dependent on it gaining ownership of 90 percent of Scania, which it needs under Swedish law to pursue a buy-out. [source: BusinessWeek]

Topics: vw

If you liked the article, share on:

Comments

Recommended

Amid reports that major rival Volkswagen would cease producing 2016 and 2017 model year diesel cars following the wake of the "Dieselgate" scandal, it’s believed that Chevrolet sees its opportunity...
by - May 22, 2017
Honda recently whips out a new feature for the S660 Bruno Leather Edition. Any guesses? Well, it’s going to be an iPhone app that goes by the name Rev Beat....
by - May 22, 2017
And so it goes, Ford is not at all closing its doors to an all-electric F-150 pickup. The American manufacturer initially laid out its plans for an F-150 hybrid earlier...
by - May 22, 2017
As it is now, Nissan Motor’s Nismo road car operations is a relatively a small business, with an annual volume of 15,000 performance-oriented cars. However, Nissan is giving Nismo fans...
by - May 21, 2017
The refreshed 2018 Acura TLX will be hitting the showrooms next month with a starting price of $33,000 for the TLX 2.4L and $36,200 for the V6. Coming out with...
by - May 21, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries