Volkswagen Seeking Control of MAN
January 09, 2013
Volkswagen is seeking full control over German truck maker MAN through a "domination and profit and loss transfer agreement," a type of German contract similar to a parent company and subsidiary.
A statement from Volkswagen says it will start talks on this subject with MAN's Executive Board and called the step "a further milestone on the road to creating an integrated commercial vehicles group."
According to published reports, the next step would be an offer to MAN shareholders.
Entering into a domination and profit and loss transfer agreement is designed to enable Volkswagen and MAN to strengthen and simplify their cooperation, thereby increasing the competitiveness of both companies.
A domination and profit transfer agreement requires 75% of shares and gives the acquirer access to the liquidity of the company it bought. Volkswagen currently holds 75.03% of the voting rights in MAN SE. Volkswagen already has a similar agreement in place with Audi.
Last year, according to published reports, top executives from Volkswagen and MAN downplayed the possibility of such an agreement, but Volkwagen Chairman Ferdinand Piech has "been keen to accelerate cooperation between the different truck brands in the Volkswagen stable including Scania and MAN," reports Reuters.
The Volkswagen Group emphasized that MANs business activities would continue and that MAN would retain its brand-specific characteristics and business areas.