Volkswagen Plans to Sell Bus And Truck Unit
2008-12-17 Source：english.chinabuses.com
FRANKFURT -- MAN AG said it will acquire the Brazilian truck and bus operations of its biggest shareholder, Volkswagen AG, for about ?1.18 billion ($1.58 billion), the first major step in the companies' plan to forge a European truck alliance.
Analysts say that the German truck maker is paying Volkswagen a high price, but Volkswagen could in turn use the proceeds to boost its stake in MAN.
Volkswagen holds a 29% stake in MAN, making it the company's biggest shareholder, and also owns a stake of about 69% in Swedish truck maker Scania AB. Volkswagen has been pushing for a three-way alliance of the companies' truck operations.
"This move is most likely just the first step of Volkswagen's plans in the truck sector," said Roman Mathyssek, an analyst at research firm IHS Global Insight. "It could indicate that Volkswagen will increase its stake in MAN further, and also foster the integration of Scania as part of the alliance," he said.
Ferdinand Piech, supervisory-board chairman at both VW and MAN, earlier this year said that the possible synergies of a tie-up between Volkswagen, MAN and Scania might prove to be twice as high as the initial estimate of ?500 million.
Daimler AG's Mercedes-Benz unit and VW are the market leaders in Brazil in terms of truck sales, with market shares of around 30% each. Munich-based MAN has so far been focused mainly on the European market.
"Having concentrated on our core business units, MAN is now focusing on expansion in all business areas," MAN Chief Executive Hakan Samuelsson said. "The acquisition of VW Truck & Bus in Brazil marks another milestone in our international growth, he said, adding that the company sees "considerable synergy potential" for its production network."
The push into emerging markets comes at a delicate time for the industry as demand for new trucks is slowing in many key markets amid the financial crisis. Brazil, along with Europe and the Middle East, has been a lucrative source of earnings for global truck makers in recent quarters amid weak demand in Japan and North America.
Last week, Daimler AG, the world's largest truck maker by sales, confirmed that it will pay $250 million for a 10% stake in Russian truck maker Kamaz.
Mr. Samuelsson told reporters in S?o Paulo that MAN would consider launching its own truck brand in Brazil as part of a dual-brand strategy in combination with VW.
VW's Brazilian truck and bus unit employed about 5,000 staff and produced around 47,000 medium- and heavy-duty trucks as well as urban buses and long-distance coaches last year.
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