Scania Rejects MAN Bid

Posted on September 18, 2006

Scania’s board of directors have rejected a $12.2 billion takeover offer from German truckbuilder MAN, which indicated it would continue its efforts to sell the deal to Scania shareholders. MAN presented its cash-and-share offer as an opportunity for two mid-sized rivals to combine to form a company that would control roughly 28% of the European heavy truck market, ahead of both Volvo and DaimlerChrysler.

But Scania said its board unanimously rejected the offer at a meeting over the weekend. Investor AB, which holds most of the Swedish Wallenberg family's 29% Scania voting rights stake, said it "did not reflect the fair value and potential of Scania." A spokeswoman for Scania said the bid was now "hostile."

German car maker Volkswagen, Scania's largest shareholder with a third of the votes, also rejected the terms of the bid. "Volkswagen has always stated that the investment in Scania is strategic in character and is in the industrial interest of the group," it said in a statement. "Accepting the takeover offer MAN presented today for Scania would not reflect this."

MAN said it would keep trying to win over Scania shareholders, and insisted it had no plan to change the mix of shares and cash. "We are confident that ... we will get broad support for our concept in the end," MAN Chief Executive Hakan Samuelsson, a Swede and himself a former Scania executive, told analysts on a conference call.

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