Scania’s board committee advised minority owners not to accept Volkswagen’s bid for the rest of the truckmaker.
According to the board committee the $9.33 billion offer made by Volkswagen is too low and it “does not reflect the long-term fundamental value of Scania and a fair share of the expected synergy potential. Scania is a world leader in its industry, and the committee has strong faith in the business plan set out.”
Volkswagen’s plan is to takeover Scania and bring back a stalled plan of creating a global heavy truck unit which will be able to compete with the market’s leaders: Volvo AB and Daimler AG. Although VW has invested billions over the past decade in the German truckmaker MAN SE, the financial rewards failed to appear as minority investors refused to share technology which would have increased profit.
During the first two months of this year Scania’s market share in Europe increased from 14.7% to 14.9% and the truck-maker sees its operating margins improving in the following years after the company made “significant investments” to strengthen its product line.
“They have obviously done their job,” Carl Rosen, head of the Swedish Shareholders’ Association, said today of the board’s recommendation.
“We still welcome an offer as the situation with a majority owner that cannot represent the minority owners is untenable. We expect that VW, if they want to complete the transaction, will come with a new offer.”