In the news: Volkswagen AG Chairman Ferdinand Piech was reported to be planning of joining MAN AG's supervisory board. This will enable Europe's largest automaker to push through with their plan to create a three-way combination with Swedish rival Scania AB--that is according to sources who are familiar with the situation.
MAN has also announced that Piech and Rupert Stadler chief executive officer of Volkswagen's Audi luxury unit are going to be the candidates for board seats at the annual general meeting which will be held on May 10.
It should be noted that Volkswagen---Europe's largest automaker and maker of quality --- has increased its stakes at MAN to 29.9 percent from 20 percent which increases its power to influence the merger of its own truck division with Scania and MAN. And if ever Volkswagen succeeds with its plan in merging the two truckmaker with its own it will become Europe's largest truckmaker surpassing DaimlerChrysler AG and Volvo AB.
According to Stephen Pope, head of equity research at Cantor Fitzgerald in London, "this gives a clear signal that Volkswagen wants to wield greater influence over this business and extend its reach within the commercial vehicle industry. Volkswagen also clearly wants to dictate the strategy of any merger." It was last September when MAN has made a hostile bid for Soedertaelje, Sweden-based Scania but dropped the offer on January this year. But with Volkswagen to control MAN the possibility of pursuing a merger with Scania is high.
There are two aspiring candidates who are seen to replace Joachim Milberg -- Bayerische Motoren Werke AG's supervisory board chairman, and Herbert Demel, chief executive of Magna Powertrain AG. Andreas Meurer, Volkswagen spokesman and Andreas Lampersbach spokesman of MAN refrain from giving their comments on the matter.
It is no secret that Piech who is at present the CEO of Volkswagen has also held the same role in Scania AB from May 2000 to April 2003. Europe's largest automaker, Volkswagen is the largest shareholder of both Scania and MAN. Piech is also occupying a seat on the board of Porsche AG which is controlled by none other than Piech and Porsche families. Porsche which has the highest profit margins of any carmaker in the world owns 27.4 percent of Volkswagen which strengthens Piech position in the company.
Piech was also the one responsible for ousting CEO Bernd Pischetsrieder and replaced him with his favorite protege Martin Winterkorn who was at that time the head of Audi which is one of Volkswagen's most profitable units.
It was last Oct. 4 when Volkswagen announced that it has purchased 15.1 percent of MAN's shares as a "strategic move". The company has announced a month later that it has increased its holdings to around 20 percent and was given the privilege to increase its stake to as much as 29.9 percent.
Last January MAN withdrew its 10.3 billion-euro bid for Scania due to opposition from Volkswagen and Investor AB-also Scania's two largest shareholders. Europe's largest automaker has persistently said that it favors a friendly combination of MAN and Scania. And with Piech to seat on MAN's board it is not a remote possibility.
