VW plans 6.7 billion euro Scania buyout to seal trucks deal

Fri Feb 21, 2014 4:46pm EST
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By Andreas Cremer

BERLIN (Reuters) - Volkswagen (VOWG_p.DE: Quote) plans to buy out minority shareholders of Swedish trucks division Scania SCVb.ST for 6.7 billion euros ($9.21 billion) as it aims to jump-start a stalled eight-year effort to forge Europe's biggest truckmaker.

VW has spent billions of euros over more than a decade on expanding stakes in Scania and its other trucks division MAN SE to reap cost savings and take on Daimler (DAIGn.DE: Quote), the world's biggest truck maker.

"We are launching this takeover offer to remove restrictions to a deeper cooperation between Scania and MAN," Finance Chief Hans Dieter Poetsch said on a conference call.

VW said in a statement late on Friday it will sell preferred shares for up to 2 billion euros, issue hybrid capital of up to 3 billion euros and draw another 2 billion euros from its ample cash reserves of 16.9 billion euros.

Europe's biggest automotive group is struggling to replicate its effective multi-brand management of passenger-car marques, such as luxury flagship Audi and Czech division Skoda in its truck operations, the success of which is important for a goal of becoming world market leader by 2018.

Wolfsburg-based VW, which together with MAN already owns 62.6 percent of Scania's equity and 89.2 percent of the votes, said it named ex-Daimler (DAIGn.DE: Quote) executive Andreas Renschler to head up its trucks operations from February 1, 2015.

Renschler, the former head of Daimler Trucks who unexpectedly resigned last month as head of production at the luxury Mercedes-Benz division, will replace VW's incumbent trucks chief Leif Oestling.

Some executives at VW's Wolfsburg-based management were frustrated with the lack of progress under the 68-year-old Oestling, a former Scania CEO, whose three-year contract at VW expires in 2015.   Continued...

A general view of the Volkswagen plant in Chattanooga,Tennessee February 14, 2014. REUTERS/Christopher Aluka Berry