Volkswagen’s takeover bid for MAN has been given approval by the European Commission, and as such is one step closer creating a powerful European truck business that compete with rivals Volvo and Daimler.
Chairman of Volkswagen Ferdinand Piëch has his sights on Volkswagen becoming the world’s largest car and truck manufacturer by 2018.
The announcement on September 26 will allow Volkswagen to pursue a co-operation effort between MAN and Scania to deliver what it calls “substantial synergies” in procurement, development and production.
A regulatory dispute with competition authorities at the Commission had previously forced Volkswagen to adjust its takeover bid. However the European Commission explained that the takeover would not significantly impede competition as Volkswagen would be facing “strong competition” from other well-established manufacturers. The German car manufacturer’s bid to gain control of Munich-based MAN during the summer was upheld by the European Commission, which explained to Volkswagen it should not appoint a total of five members to its supervisory board prior to receiving the necessary merger approval.
VW offered a mandatory €95 per ordinary share to MAN at the end of May, after its shareholding rose above 30%. This was below its ideal figure however, and 35-40% was the preferred target. Such a proportion would have given VW a stable majority at MAN’s annual general meetings. VW anticipates the takeover could be worth €200m annually, mainly in procurement.
The Commission examined the impact of the transaction on the supply of heavy trucks and deemed the takeover to pose no threat to the quality of competition in the industry. It said in a statement: “The Commission concluded that the proposed transaction would not significantly impede effective competition … because the merged entity would continue to face strong competition from other well established manufacturers.”
Volkswagen now controls an impressive array of marques including Seat, Bentley, Audi and Scania, in which it holds nearly 72% of voting shares.