Porsche on Tuesday came closer to its goal of controlling a €130bn ($175bn) European car and truck empire as it increased its stake in Volkswagen to more than 50 per cent, sparking a mandatory takeover offer for the truckmaker Scania.
Porsche, the financially nimble German sports carmaker that builds only a 60th of the cars of VW, reiterated that it had no strategic interest in Sweden’s Scania and was likely to make a low offer.’
VW owns 69 per cent of Scania, and Porsche is now required by Swedish law to make a mandatory offer for the truckmaker.
Swedish regulators are expected to name the bid price for Porsche shortly. After a period of at most five weeks, shareholders in Scania should receive the published bid.
Porsche’s takeover offer for Scania is likely to be about 15 per cent under the current share price, according to analysts at Morgan Stanley.
Porsche has hinted that any shares it would gain in the offer would be sold on to VW. That would mirror the approach Porsche took when forced to bid for Audi, the luxury car unit of VW that has a small free float.
The increase of Porsche’s stake in VW, Europe’s largest carmaker, from 42 to 50 per cent moves the drama surrounding many of Europe’s biggest names in cars and trucks forward a step, but a lot remains to be decided.
Porsche will be in control of not just VW’s well-known stable of car brands, ranging from Bugatti and Lamborghini to Skoda and Seat, but also Scania and its German rival, MAN, in which VW has a controlling stake of nearly 30 per cent.
Industry executives and analysts expect MAN and Scania to merge one day, especially as MAN owns about 20 per cent of its Swedish rival. But, following MAN’s purchase late last year of VW’s truck assets, it is unclear what the complicated structure will look like.
Porsche is also blocked from gaining full control at VW by the German regional government of Lower Saxony, which holds a blocking minority stake of 20 per cent.
It is supporting a challenge to the legality of that blocking minority in the European courts, but a decision could be more than a year away.
Porsche needs 75 per cent to enforce a domination agreement on VW, which would give it access to VW’s large cash flows.
Porsche caused turmoil in the markets last year when the carmaker revealed it held nearly 75 per cent through a direct stake and share options. But it waited several months, until VW’s shares fell from a high of €1,005 to about €250, before increasing its stake to 50.8 per cent.
Porsche officials have given conflicting signals as to when the company could take a 75 per cent stake, with some suggesting it would come this year while others say it would wait for the European court decision.
« RISI ECONOMISTS: The global slowdown hits paper and packaging demand in Latin America Moventas starts negotiations regarding personnel reductions and lay-offs in its Industrial Gears »