European Union approves VW's takeover of Scania
14 Jun 2008
The European Commission has cleared German passenger car maker Volkswagen's proposed takeover of Scandinavian commercial vehicles maker Scani, in which VW bought a majority stake in March.
Volkswagen took sole control of Scania in March this year, pending regulatory approval from the European Competition Commission, when it raised its stake to 68.6 per cent of the voting rights and 37.73 per cent of the capital rights When it bought the entire stakes of Investor AB and the Wallenberg Foundation.
The commission said that the transaction would not significantly impede effective competition in the EU.
Volkswagen, one of the biggest car manufacturers in the world, is focused on passenger cars and light commercial vehicles, including spare parts and accessories. Its brands include Volkswagen, Audi, Seat, Skoda, Bentley, Lamborghini and Bugatti. It also has some diesel engine activities. In addition, Volkswagen holds a minority shareholding in MAN, a German producer of medium-sized and heavy trucks, buses, and engines.
Scania develops, manufactures, markets and sells trucks with a gross vehicle weight of more than 16 tonnes for long-haulage, construction haulage and distribution of goods. Scania also manufactures and sells buses and chassis for buses and industrial and marine diesel engines and is mainly active in Europe.
The commission said that the activities of the two auto makers do not overlap as far as their core business is concerned. It observed that Scania was not involved in the manufacture of passenger cars and light commercial vehicles.
As regards Volkswagen's non-controlling minority shareholding in truck and bus manufacturer MAN, the commission decided that this would not have adverse effects on competition. Volkswagen's own activities in the production of trucks and buses are limited to Central and South America. On the other hand, Scania is a producer of heavy trucks focussed on the European markets.
However, it said the only overlaps existed in the manufacturing of diesel engines for industrial use and for marine applications. As these overlaps are only marginal, the commission concluded that the transaction would not give rise to competition concerns in any of the EU markets.