This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

VW Succeeds with $9.3B Scania Buyout Offer

BERLIN (The Deal) -- German carmaker Volkswagen AG on Tuesday, May 13, said its 6.7 billion euros ($9.25 billion) offer for the outstanding minority stake of Swedish truck and bus company Scania has succeeded, allowing it to realize a dream of better competing against larger truckmaking rivals Daimler and Volvo.

After extending the deadline for investors to sell their shares, VW said the offer hauled in 723.7 million Scania shares, giving the Wolfsburg, Germany-based carmaker 90.5% of Scania.

VW had said it would only buy the shares if it could become at least a 90%-owner in Scania. It can then legally squeeze out recalcitrant shareholders and delist the company.

"We are pleased that the necessary number of Scania shareholders have accepted our attractive offer," said Volkswagen Chairman Martin Winterkorn at the company's annual general meeting Tuesday.

The maker of the Beetle, the Golf and Audi luxury cars can now finally realize a more than decade-old dream of supervisory board chair Ferdinand Piech. In the '90s, as VW chairman, he envisioned a company that made everything from economical city cars to hulking trucks. Piech is the patriarch of the Porsche family that founded both VW and its namesake sportscar manufacturer.

The company first bought a minority stake in Scania in 2001 with Piech at the helm. Five years later, it bought a minority stake in Munich truckmaker MAN SE as MAN itself considered buying Scania to outmaneuver Volkswagen. Volkswagen then gradually increased its MAN stake and gained three-fourths of the Munich-based truckmaker last year.

Political wrangling and problems at other Volkswagen divisions slowed the company's efforts to move quickly on Scania but this year it finally made a successful bid.

The company has said its MAN and Scania investments already allow it to save about 200 million euros a year on joint purchasing and development. However, a full integration should allow it to eke out as much as 650 million euros in additional savings.

VW late last month extended its Scania offer to May 16 after the offer, at 200 Swedish kronor ($30.46) per share, only boosted its controlling stake to 88.25%. Investors still have until that date to accept the approach and Volkswagen said it would settle the offer May 27.

Scania's independent directors had earlier said the offer was too low. A number of investors also criticized the price, which Volkswagen has said was a 30% premium to the pre-bid price.


Volkswagen's advisers on the Scania offer are Goldman, Sachs & Co. and Rothschild, as well as law firms Roschier Advokatbyra on Swedish law, and Clifford Chance LLP, on German and U.S. law.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs