VW Secures Enough Scania Stock for Takeover to Succeed


Volkswagen AG (VOW) secured enough backing from minority owners to take full control of Scania AB (SCVB) after the fifth-largest shareholder changed course and accepted the 6.7 billion-euro ($9.2 billion) bid for the Swedish truckmaker.

Alecta, a Swedish pension fund that holds 2.04 percent of the share capital, said today it had decided to accept VW’s offer after earlier rejecting it as too low. That follows the acceptance of Investor AB, with about 0.4 percent of the shares. Volkswagen officials declined to immediately comment.

VW, Europe’s largest automaker, on April 30 extended the offer period for its bid for the rest of Scania after failing to reach the necessary 90 percent threshold needed under Swedish law to force out remaining investors. It had by then received acceptances giving it control of 88.25 percent of Scania’s shares. Adding Alecta and Investor AB (INVEB)’s stock to that tally would give VW 90.7 percent of the truckmaker.

“After renewed talks with Volkswagen, it is our conclusion that a higher bid price cannot be achieved,” Alecta said in a statement on its website today. “Even though the bid still does not fully reflect Scania’s long-term value, we believe it is acceptable.”

Scania gained as much as 0.2 percent to 199.90 kronor — just short of the offer price of 200 kronor per share — and traded 0.1 percent higher as of 9:13 a.m. in Stockholm. VW was little changed in Frankfurt.

Full Integration

VW has been pushing to fully integrate the Soedertaelje-based truckmaker to deepen cooperation between the Swedish company and Munich-based MAN SE, which VW also controls. Scania’s integration is key to the German carmaker’s effort to forge a global heavy-trucks unit that can take on industry leaders Daimler AG (DAI) and Volvo AB. (VOLVB)

Investors holding 5.8 percent of the shares had publicly rejected the bid prior to the end of the initial offer, casting doubt over the deal. The carmaker offered 36 percent more than Scania’s closing price prior to the Feb. 21 proposal. An independent Scania board committee also recommended rejecting the deal.

Investor AB, the Swedish Wallenberg family’s publicly traded holding company, also initially rejected the vid. After VW announced on April 30 that it had secured 88.25 percent of the shares and extended the offer period, Investor AB changed course and said it would tender its shares.

VW Advisers

“With our limited trading position and given the wide acceptance among other shareholders, we do not wish to contribute to an unclear ownership structure in Scania,” Investor AB said then, adding it held less than 0.4 percent of Scania’s share capital.

Goldman Sachs Group Inc. and Rothschild were VW’s financial advisers on the Scania offer, according to an earlier statement on VW’s website. Roschier Advokatbyraa AB and Clifford Chance LLP acted as legal advisers.

The German manufacturer has thus far reaped limited financial rewards for the billions of euros invested in buying control of Scania and MAN in the last decade as minority investors resisted efforts to share technology that would boost profit. The combined businesses would overtake Stuttgart, Germany-based Daimler and Gothenburg, Sweden-based Volvo as the biggest truck producer in Europe.

Limited Savings

VW has achieved only 200 million euros in savings from joint work among its light commercial-van unit, Scania and MAN. VW’s goal is to deepen cooperation among the three businesses in areas such as drivetrains, chassis, cabins and electronics to reach annual operating-profit synergies of 650 million euros.

The automaker already has a domination agreement with MAN, which means the two can legally work more closely. That left Scania as the last unit preventing VW from creating an integrated heavy-truck division.

VW hired former Daimler trucks chief Andreas Renschler, 56, to succeed Leif Oestling in overseeing the commercial vehicles business. Renschler will assume the post in February.

At Daimler, he spent almost a decade running the truckmaking operations, the world’s biggest by revenue. His efforts included restructuring projects in the U.S., Japan and Brazil as well as expanding in emerging markets including China, Russia and India.


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