Volkswagen makes $20bn MAN offer to kick off truck merger

Volkswagen made a long-awaited bid for MAN, valuing it at $20 billion and stepping up plans to merge the German truckmaker with Swedish rival Scania in which it also holds a stake.

Volkswagen, Europe's biggest carmaker, said on Monday it would offer MAN shareholders €95 per ordinary share and about €60 per preference share, in both cases less than the stock was trading at last week ahead of the bid.

"This low-ball offer serves to start the takeover process but still have maximum flexibility," MM Warburg analyst Marc-Rene Tonn said.

The offer, which values the whole of MAN at €13.76bn ($19.79bn), was triggered when VW increased its stake above 30 per cent, requiring a mandatory bid for the remaining shares under German rules.

The price represents a 1.6 per cent discount to Friday's close of MAN common shares and 14.2 per cent discount on Friday's close for the preference shares.

VW already owned 29.9 per cent of MAN ordinary shares, which turned positive after the announcement, trading 2.1 per cent higher at €98.52 at 1042 GMT. Volkswagen's blue-chip preference shares narrowed losses to trade 1.5 per cent lower at €128.45.

"The timing of the offer is unexpected, but it was clear it would come eventually," MM Warburg's Tonn said.

Volkswagen has been toying with plans to create Europe's biggest truckmaker by merging MAN with Scania, in which it has a controlling stake.