The European Commission (EC) yesterday approved the planned acquisition by MAN AG of Germany of Scania AB of Sweden. This decision removes a major regulatory hurdle to a proposed transaction that would add pressure on competitive truck makers to seek acquisitions of their own.
“We have the go-ahead from all authorities in the European Union—and it’s now up to Scania’s shareholders,” said Håkan Samuelsson, MAN CEO. “We are confident that the intended combination will materialize.”
Truck manufacturers have long recognized a trend in the consolidation of the medium- and heavy-duty truck markets and a successful MAN acquisition may well accelerate it.
But an MAN-Scania deal is far from imminent. Today Bloomberg reported MAN said January 31 is the final deadline for Scania investors to decide to approve of its 10.3 billion euro ($13.6 billion) hostile takeover attempt. MAN said there are no plans to raise its bid.
Scania’s CEO said the MAN offer undervalues the company, but Scania investors are also weighing whether it could stand alone against larger European competitors.
The merger would combine two of the largest European truck and bus manufacturers, EC said. But a joint MAN-Scania company would face “strong competition” from manufacturers such as DaimlerChrysler, Volvo, Iveco and DAF, the commission added.
“The Commission is satisfied that competition on price and technology will remain strong in the future on the bus and truck markets, in particular considering the increasing importance of environmentally-friendly technologies in this sector,” stated EC Competition Commissioner Neelie Kroes.
In addition to the bid for Scania, MAN has an agreement with International Truck and Engine Corp. to build heavy-duty diesel engines for Class 8 trucks.
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