4 Min Read
* Low offer for MAN due to be made official by end-May
* Should be able to build stake in MAN after offer
* Juggling several big projects
By Maria Sheahan and Helen Massy-Beresford
FRANKFURT/PARIS, May 30 (Reuters) - Volkswagen (VOWG_p.DE) is set to formalise its approach for truckmaker MAN (MANG.DE) in coming days, marking another milestone in the German automaker's bid for global dominance.
The offer is one in a series of ambitious plans Europe's largest carmaker has on the go as it strives to overtake Japanese rival Toyota Motor (7203.T) as the world's No.1 player by 2018. [ID:nN24267251]
Earlier this month VW marked the opening of a $1 billion U.S. assembly plant, it has been powering ahead in China, now the world's largest auto market, but still has progress to make on its alliance with Japanese group Suzuki (7269.T).
It has also been working to fold sportscar maker Porsche (PSHG_p.DE) into its business, and chairman Ferdinand Piech has set his sights on Alfa Romeo. [ID:nLDE71R2MV]
On top of all that, VW wants to combine MAN and Swedish truck maker Scania SCVb.ST to build Europe's largest truck maker to rival world leader Daimler (DAIGn.DE).
Analysts are unfazed by VW's ambition, saying the large number of projects means the risk of any one having a major impact on the company's shares in the event of a problem or delay is reduced. [ID:nLDE7480ZB]
Earlier this month, VW announced plans to make a low cash bid of 95 euros per share to buy out MAN, valuing the company at 13.8 billion euros ($19.7 billion), after its stake rose above 30 percent.
If, as expected, the offer sparks little investor interest, under German rules VW will be allowed to buy shares in the market and get regulatory approval for closer cooperation between MAN and Scania, in which it holds a 45 percent stake.
"Volkswagen could theoretically even finance a full takeover of MAN. It has a lot of financial power," Metzler Equities analyst Juergen Pieper said. "The strategy is not just about scale, as it was for Fiat FIA.MI in the Chrysler deal. Volkswagen picks its targets very carefully."
Morgan Stanley analyst Laura Lembke said VW might content itself with 40 percent of MAN, rather than pushing to fully combine the two manufacturers.
With plans to tighten ties in the works for some time and the truck business based on long lead-times, major potential savings have been missed for the time being, she said.
"They have missed the opportunity in key areas where you could have saved a lot of money through synergies, R&D and platforms. Euro 6 (emissions standard) engines are already being introduced this year and both of them have just renewed their product portfolios.
"This is why VW is taking an alternative route that gives them access to the other savings you can realise very quickly on the purchasing." (Editing by Dan Lalor) ($1 = 0.7000 euro)