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Volkswagen said would now seek a so-called domination and profit and loss transfer agreement, a move to give it full strategic and financial control over MAN, in which it has a 75.03 percent stake.
Based on the closing price on Xetra DAX the remaining shares would cost Volkswagen at least 2.96 billion euros ($3.86 billion). The 90 euro share price in Frankfurt reflects a 3.17 billion euro price tag.
"The planned step is a further milestone on the road to creating an integrated commercial vehicles group," the company said in a statement.
A domination and profit transfer agreement requires 75 percent of shares and gives the acquirer access to the liquidity of the company it bought.
Volkswagen already has such an agreement in place with Audi, its listed luxury brand.
The move shows that Volkswagen's appetite for consolidating a global empire which includes motorcycles, cars and trucks, remains undiminished.
In November, Volkswagen topped up its war chest by raising 2.5 billion euros which it said would help strengthen its balance sheet following the purchase of Italian motorcycle company Ducati, and Porsche sports cars.
Volkswagen currently is the home to 12 brands, including Seat, Skoda, Bugatti and Bentley.
A Volkswagen spokeswoman said that the next step would be an offer to MAN shareholders.
NordLB analyst Frank Schwope said he expected Volkswagen to aim for between 95-99 percent of MAN shares.
MAN shares closed up 2 percent at 84.03 euros on Deutsche Boerse's Xetra DAX trading platform. In Frankfurt, where trading ends at 1900 GMT the shares were up 7.6 percent at 90.00 euros.
According to Thomson Reuters data 35.2 million MAN shares are not owned by Volkswagen.
Volkswagen's chairman Ferdinand Piech has been keen to accelerate cooperation between the different truck brands in the Volkswagen stable including Scania SCVb.ST and MAN, even as truck executive downplayed expectations for full integration.
In July, MAN's Chief Financial Officer Frank Lutz said a domination agreement by Volkswagen would not bring any additional synergies.
In September Volkswagen board member Leif Oestling signaled that closer integration between the different truck brands was unlikely. At the time he said Volkswagen's commercial vehicles brands Scania, MAN and VW Commercial vehicles will "coordinate rather than integrate" as they brace for a slowdown in Europe, Brazil and China.
Earlier on Wednesday a source told Reuters that Volkswagen is looking to end its commercial vehicles partnership with Daimler (DAIGn.DE), as VW seeks closer ties with MAN.
With an integration into the Volkswagen Group, 255 years of independence for MAN will end.
Reporting by Harro ten Wolde, Edward Taylor, Jan Schwartz and Maria Sheahan; Editing by Victoria Bryan and Mike Nesbit