Truck wars in Europe

MUNICH, Sept 15: Efforts to create the market leading truckmaker in Europe gained pace on Friday when MAN AG said its supervisory board would meet this weekend to review plans to buy Swedish rival Scania.

Scania's board was also expected to convene at the weekend to discuss the mostly cash offer that includes stock as well, a source familiar with the matter said.

A market announcement could come out as early as Monday, sources familiar with the deal told Reuters this week.

Germany's MAN, Europe's third-largest truckmaker, has been wooing major Scania shareholders Volkswagen and the Wallenberg family with an offer worth around 440 crowns per share, valuing the group at about 9.5 billion euros (.1 billion), sources close to the talks have told Reuters.

Volkswagen has 34 percent of Scania's voting rights while the Wallenbergs have 29 percent via investment company Investor AB and a family foundation.

While Volkswagen has reaffirmed its commitment to its Scania stake, it has indicated it could accept shares for its holding as a first step and later inject its own truck business into the combined group, probably for more shares, one of the sources said.

It has been harder to persuade the Wallenbergs to support MAN's offer for Scania, a Swedish industrial icon that boasts industry-leading profit margins due to its focus on the heavy-duty truck business.

WINDOW OF OPPORTUNITY MAN

confirmed on Wednesday its interest in buying Scania but has declined further comment before a statement it plans for next week.

Together, the two truckmakers would control the highest market share in Europe, ahead of global market leaders DaimlerChrysler and Volvo.

In Paris, French carmaker Renault signalled it could sell its Scania stake, which amounts to 2.9 percent of the capital and 5.2 percent of the votes.

''We have always said that contrary to Renault's stake in Volvo, the Scania stake is not strategic,'' a company spokeswoman said.

In a flat European market, shares in MAN inched up 0.1 percent to 63.25 euros by 1031 GMT, while Scania gained 1.8 percent to 428 Swedish crowns.

MAN is seeking synergies of more than 500 million euros from the takeover, which would give it economies of scale that DaimlerChrysler and Volvo are using to lock in cost advantages.

Analysts have long expected second-tier truckmakers like MAN and Scania to use takeovers to bulk up, but the timing of the deal is a surprise given that a global truck boom that has pushed company valuations to peaks is starting to wane.

''There is a small window of opportunity for MAN. Everything is aligning for them, so you go for it when things align even if it is the top of the market,'' said one banker who follows the sector closely.

MAN's solid profit growth and share performance put it in a strong position at a time of growing confidence in Germany for large takeovers, as industrial gas group Linde's 8.2 billion pound (.5 billion) acquisition of Britain's BOC showed, he added.

REUTERS