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

The 2018 Cadillac CTS-V sedan will be getting a new paint job that will give it a unique icy feel. Dubbed the Glacier Metallic Edition, this special model was built...
by - August 23, 2017
During the North American International Auto Show at Detroit in 2015, Hyundai introduced a concept pickup truck they named the Santa Cruz. This model took home the Concept Truck of...
by - August 23, 2017
Porsche introduces the technologically advanced wheels with braided carbon fiber. These will be initially available on the 911 Turbo S Exclusive Series. Being the first car manufacturer to offer such...
by - August 23, 2017
All eyes were turned to the fuchsia pink bespoke McLaren 720S MSO at the 2017 Pebble Beach Concours d’Elegance Sunday. Surely, we can understand why. The one-off supercar, which was...
by - August 23, 2017
Hyundai Motor Group – including both Hyundai Motor and Kia Motors – has disclosed a wide-ranging plan to introduce 31 environment-friendly models in a new development roadmap that aims to...
by - August 22, 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