VW wants to take complete control of Scania.
As it launches an $8 billion bid for the remaining shares of the Swedish truck maker Scania, Volkswagen AG also has recruited a former top executive from Daimler AG to take over its commercial vehicle business, starting next year.
Andreas Renschler abruptly and unexpectedly quit as head of manufacturing and procurement at the Mercedes-Benz car group last month and will now join VW AG’s board of management as head of its commercial vehicle group on February 1, 2015.
Renschler’s resignation was considered particularly surprising since he was one of a small group of executives considered as a possible candidate to succeed Daimler CEO Dieter Zetsche.
Volkswagen, however, courted the 55-year-old Renschler, who has held important management posts inside Daimler for the past 20 years, to run its heavy truck business. Daimler, however, insisted Renschler honor the terms of its employment contract, which resulted in the year-long delay.
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Perhaps fearing the loss of more senior management talent, Daimler’s board of supervisors earlier this month extended the employment contract of the company’s chief financial officer Bodo Uebber. Daimler’s board of supervisors, however, has not extend the contract of Wolfgang Bernhard, who now heads the commercial vehicle group after being forced out last year as head of manufacturing at the Mercedes-Benz car group due to a row with the board of supervisors’ employees representatives.
The Board of Supervisors is responsible for hiring and firing executives and by German law half its seats are reserved for employee representatives.
Meanwhile, the rivalry between the two German manufacturers is intensifying. Daimler is now the world’s largest seller of heavy trucks around the world but VW is eager to expand its foothold in the segment.
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Volkswagen also announced it was launching a tender offer of 22.26 euros per share, which is worth 6.7 billion euros — or about $8 billion — for the shares of Scania, the Swedish truck and bus maker, not already under its control. VW own 62.6% of Scania’s stock and 89% of the company’s voting shares.
“With its premium products, its strong market position and its technological expertise, Scania is a core element of the integrated commercial vehicles group that we intend to accomplish under the umbrella of the Volkswagen Group. Our offer is designed to create a sustainable and clear ownership structure for Scania,” Martin Winterkorn, Chairman of the Board of Management of Volkswagen Group, said in statement.
Under the current ownership structure, however, it is not possible to leverage the full potential of closer cooperation at an operational level between Volkswagen and Scania, as well as between MAN and Scania, due to the legal restrictions in place to protect minority shareholders in the Swedish truck firm.
A full acquisition would remove the current obstacles and enable key joint projects to be implemented more rapidly, thereby achieving additional growth opportunities and synergies.
“This is a key step towards being able to fully exploit the advantages offered by the integrated commercial vehicles group for everyone involved,” Winterkorn said. “The plan to fully integrate Scania into the Volkswagen Group follows a compelling industrial logic. It will significantly improve the capabilities, efficiency and flexibility of the commercial vehicles group comprising Scania, MAN and Volkswagen Commercial Vehicles.
Winterkorn said the proposed takeover will increase the Volkswagen Group’s global presence – yet allow Scania to retain its identity.
“Volkswagen has a long and successful tradition of carefully integrating strong brands into the Group while safeguarding their identity, their traditions, their unique strengths and a high degree of independence. What we have achieved with either Audi or Porsche we will attain with Scania,” he promised. “This means that Sweden, Scania’s locations, and above all the employees of Scania, will play a central and strategic role in the integrated commercial vehicles group”,
Volkswagen, which is coming off a successful year financially, will use the Automotive Division’s existing cash to pay for the Scania offer.
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Before taking over as head of manufacturing for the Mercedes-Benz car group last year, Renschler had headed up Daimler’s commercial vehicle group for nearly a decade.
Renschler was named member of the Daimler AG Board of Management in 2004, holding responsibility for Daimler Trucks and Daimler Buses until March 2013 and subsequently taking charge of Manufacturing and Procurement at Mercedes-Benz Cars and the Mercedes-Benz Vans business unit in April 2013.