MAN to write down Scania stake

MAN plans to write down its stake in Scania, a decision that will drag the German truck and engineering group to a net loss and end speculation about a MAN-led deal with its Swedish rival.

People close to the company said the truck maker planned to write down its minority stake in Scania by €350m to just below €1bn.

Combined with about €220m in charges for settling a bribery scandal and a charge on MAN Roland, its German printing machinery joint venture, the group is set to report a three-digit million euro net loss in 2009, these people said.

MAN, which declined to comment, has become the centrepiece of takeover speculation in recent months after the replacement of most of its management board.

FerdinandPiëch, the MAN chairman is also chairman of Volkswagen, Europe’s largest carmaker which owns just below 30 per cent in the German truck maker and another two thirds of Scania.

The German car industry patriarch fuelled speculation about a deal last autumn when he said the co-operation between VW, Scania and MAN would soon “accelerate”.

Investors and analysts have speculated that VW could take over MAN or alternatively push the German truck maker into an acquisition of Scania.

MAN attempted to take over the Swedishgroup in 2006 but failed, leaving it with 17 per cent of Scania’s voting rights. The failure opened the door for VW to buy into both truck makers.

The write down by MAN’s new management board, led by spokesman Georg Pachta-Reyhofen, is seen by industry insiders as a clear signal that the truck maker has no plans to take over Scania.

One company insider also pointed to pressure from auditors to mark the stake to market after three years without any changes. “It reflects the desire for a clean start at the group,” he said.

Mr Pachta-Reyhofen’s recent appointment could give talks between Scania and MAN over joint engines and other components a new impetus.

Håkan Samuelsson, Mr Pachta-Reyhofen’s predecessor and a former Scania manager, has been at loggerheads with Scania’s management ever since he started the aggressive takeover attempt.

MAN is set to report its annual figures for 2009 on February 15. It is expected to add a pinch of optimism to its outlook, after a year in which the truck industry has been hit by a rapid and steep drop in demand.

Both Scania and Volvo, its fellow Swedish truck maker, last week predicted a gradual recovery this year from hard-hit markets.