As Europe's biggest carmaker; Volkswagen of Germany continues its expansion course, a complete takeover of its subsidiary Scania has only seemed a matter of time. But the Swedes said they might not play along.
Volkswagen's endeavors to take over truckmaker Scania completely hit a snag Tuesday when a leading panel of the Swedish company was reported to have advised shareholders not to accept a German offer put on the table in February of this year.
VW had announced it was aiming to purchase the 37.4 percent of Scania it didn't already own. The Wolfsburg-based 12-brand firm offered 6.7 billion euros ($9.2 billion) for the deal, equivalent to 200 Swedish krona per share and, according to VW, representing a premium of more than 50 percent.
But what looked like an attractive deal for the Swedes on the surface turned out not to be enough to convince executives. With the Germans' offer expiring on April 25, shareholders were warned the suggested deal did not reflect Scania's long-term prospects.
Experts not convinced
In addition, market pundits warned Volkswagen's expansion policy might cost it too much financial leeway in the years ahead. VW itself argued the complete acquisition of the Swedish truckmaker would result in savings to the tune of 650 million euros annually.
But economist Arndt Ellinghorst from International Strategy & Investment in London told Reuters news agency the expected savings would take at least a decade to materialize and would thus come far too late to justify VW's one-off input.
"The Scania deal doesn't make much sense to me, neither from a financial point of view, nor from the point of view of industry policy," Ellinghorst argued.
He suggested the complete takeover would only make sense, if VW aimed to merge Scania with its other truck brand, MAN. But Volkswagen itself had stated there wouldn't be any fusion of the two in the near future, speaking instead of "cautious integration."
hg/kms (dpa, Reuters, AP)