Man Buys Vw Trucks

[Mack 3P]

MAN acquires VW's Brazilian truck and bus operations. MAN AG is to acquire VW Truck & Bus, which is based in Resende (Brazil), from Volkswagen AG. The company with an enterprise value of €1,175 million ($1.58 billion) is set to be transferred on January 1, 2009. The executive bodies of MAN and VW have already granted their approval. Volkswagen Truck & Bus has been producing trucks and buses in Resende since 1996. The company is Brazil’s largest truck manufacturer and leads the market for trucks with a gross vehicle weight of more than five tons. The vehicles are primarily sold in Latin America and South Africa. Around 47,000 trucks and buses were supplied in 2007. The company has a comprehensive sales and service network in Brazil and neighboring countries. Around 5,000 employees work at the Resende plant – one of the most modern truck production facilities – for VW Truck & Bus and its partner suppliers. Acquiring the Brazilian company and its strong brand enables MAN to expand into the South American market, one of the fastest-growing regions, thus consistently strengthening its commercial vehicles business. VW is the biggest shareholder in both MAN and Sweden's Scania. VW has 68.6 percent of Scania's votes, while MAN has 17.2 percent. MAN news release, 2008-12-15

Carlos Pacheco comments--this will give MAN access to emerging markets such as Latin America, Africa, Asia and M East. MAN and VW products practically do not compete once VW trucks and buses focuses on the low cost range of products. This will also provide MAN with a complete product range from Class 3 thru Class 8. A European credit analyst quoted by Reuters "thinks that this transaction is the next step in the formation of the Porsche-VW-Scania-MAN group." The world continues to get more interdependent.