EU Okays Buyout Plans
December 21, 2006
EU anti-trust regulators had spent six weeks reviewing whether MAN's bid to create Europe's biggest truck-maker would create a dominant market force. The Commission said that it had concluded that the acquisition "would not significantly impede effective competition in the (EU area) or any substantial part of it."
MAN formally launched a hostile takeover bid for Scania on Nov. 20, offering 51.29 euros ($67.42) per share or 10.2 billion euros in all.
The German truck giant originally gave Scania shareholders until Dec. 11 to accept the terms, but has extended the deadline until Jan. 31, 2007. The Scania board and the company's key Swedish shareholders have firmly rejected the MAN offer, saying it undervalued Scania.
Kroes is "satisfied"
Competition Commissioner Neelie Kroes said she was "satisfied that competition on price and technology will remain strong in the future on the bus and truck markets, in particular considering the increasing importance of environmentally-friendly technologies in this sector."
The merged entity would still face strong competition from other important manufacturers such as DaimlerChrysler, Volvo, Iveco and DAF.
Scania keeps resisting
After the announcement, Scania said it would continue to resist the takeover and the ruling would not influence its opposition.
"We are not surprised," a Scania spokeswoman said. "But the EU has now taken a stance on the market concentration issue. The okay by the Commission is linked to the fact that Scania and MAN are strong in different regions of Europe."
VW mulls future
Complicating the rancorous takeover battle are signs that Scania's biggest shareholder, German-based carmaker Volkswagen AG, has been weighing up whether to try to orchestrate a three-way merger between MAN, Scania and VW's truck operations.
But VW, which is also Europe's biggest automaker, has said that no concrete plan for a three-way merger existed. With a 34-per-cent stake, VW is also MAN's largest shareholder.
"In the case of an apparent failure of the bid, Volkswagen will keep all alternative possibilities open," the VW board said at the end of a meeting last month.