* MAN to buy back 70 pct of Ferrostaal for 350 mln euros
* MPC to then buy 100 pct of Ferrostaal for up to 160 mln
* German truckmaker won't see hit to earnings from deal
* MAN shares up 5.1 pct, outperforms rivals
(Adds comments from analyst, companies, updates shares)
By Christiaan Hetzner and Victoria Bryan
FRANKFURT, Nov 28 German truckmaker MAN
agreed to sell its Ferrostaal unit in a deal that ends
a year-long dispute, prevents further related losses and removes
the last remaining legal risks for shareholders from a bribery
scandal that rocked the group.
Abu Dhabi's International Petroleum Investment Company
(IPIC) will sell back its 70 percent stake in Ferrostaal to MAN,
which then will sell the unit in its entirety to the MPC Group
based in Hamburg, the German industrial company said on Monday.
"This settlement is the outcome of very good cooperation
between both shareholders, and enables IPIC and MAN to finally
put their differences aside," said IPIC's managing director,
Khadem Al Qubaisi, in a statement published by MAN.
MAN sold 70 percent of Ferrostaal to IPIC in March 2009,
exercising a put option for the remaining 30 percent at the
beginning of 2010 in a deal that had valued the entire unit at
around 700 million euros ($929 million).
An ensuing scandal over bribery payments made by a large
number of MAN's former businesses including Ferrostaal and the
legal fines that resulted prompted IPIC to renege on the deal
entirely, triggering a bitter dispute that has raged ever since
over who should fund the company's operations.
MAN said in a statement it would pay 350 million euros to
buy back the Ferrostaal shares from IPIC, only to then
immediately unload the subsidiary onto MPC for a price of up to
160 million euros with closing expected in the first quarter.
A spokesman for MAN said the sale would be reflected in the
accounts for the current fourth quarter, but would not lead to
any earnings hit: "Provisions already booked this year were
sufficient to cover the risks."
Ferrostaal, a plant construction and engineering business,
had in October agreed to a 149 million fine linked to the
MARKET EYES VOLKSWAGEN
"Ferrostaal still has to pay the fine to the prosecutor's
office, but that is a matter for the owner MPC, and is no longer
relevant for us," the MAN spokesman said.
Shares in MAN, a maker of trucks and large diesel engines,
traded 5.1 percent higher as of 1212 GMT, outperforming peers
Scania and Volvo, which rose 4.1 pct and
3.8 percent respectively.
"(The deal) may revive speculation that Volkswagen may
increase (its) MAN stake," said a Frankfurt-based trader, who
declined to be named.
Metzler Bank's Juergen Pieper said investors were happy to
see the issue resolved once and for all, but saw little reason
at present for Volkswagen to scoop up more MAN shares since the
carmaker already has already begun forging its truck empire.
"They already have the majority in MAN, so there's no time
pressure. Volkswagen currently has more pressing problems with
the Porsche and Suzuki," he said.
Volkswagen offered MAN investors 95 euros per share as part
of a mandatory tender bid that saw their voting stake rise to
55.9 percent at a cost of over 3.4 billion euros.
The German carmaker might be more inclined to acquire
further shares in MAN as long as the stock is trading at a
significant discount to the tendered offer price. The next
disclosure threshold is 75 percent.
The Ferrostaal deal won't have any impact on VW's plans to
extract synergies from a partnership between its two truck
businesses, Scania and MAN, since all three sides have been in
negotiations ever since Volkswagen received the MAN shares on
(Editing by Mike Nesbit)