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

South Korean carmaker Kia will try to follow up the success of its Sportage compact sports utility vehicle by introducing a smaller SUV (subcompact) in the United Kingdom in the...
by - October 18, 2017
It can no longer be denied that Jaguar Land Rover wants to design some more hardcore type versions of their SUV range --- soon after launching the Discovery SVX only...
by - October 18, 2017
Motorists in the United Kingdom who intend to purchase the new 2018 Hyundai Kona subcompact sports utility vehicle could start placing their orders on November 2, 2017. Marked by Hyundai...
by - October 18, 2017
For many years, Lamborghini has always relied on the use of large and powerful engines including the V10 and the V12. In fact, the company’s very first engine in the...
by - October 17, 2017
You can now get the Opel Crossland X that’s LPG-powered if you are not a fan of diesel. Recently, the company released their version of the Peugeot 2008 equipped with...
by - October 17, 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