Swedish truck maker Scania has turned down a 9.6 billion euro ($12.2 billion) bid from Germany’s MAN AG, but industry watchers say merger talks aren’t dead.

Combining the two companies would create Europe’s biggest commercial vehicle group. MAN said the combination would deliver strong value to the shareholders of both companies. It also argued that the enlarged group would be able to increase its competitiveness and would create “a global player positioned to achieve profitable growth in existing and new markets.”
Scania’s board of directors rejected the proposal, with backing from the company’s two largest shareholders, Investor AB and Volkswagen AG. MAN reportedly has said the combined group would be a European company but there were still concerns among Swedish investors that the new company would be headquartered in Germany and subject to German union rules. However, European analysts speculate that resistance from VW and Investors AB is mainly over price and MAN might win them over with a higher offer. There is also now speculation that Scania, with Volkswagen’s support, could make a counter offer for MAN.