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German firm buys Volkswagen's heavy truck business in Brazil
German industrial conglomerate MAN has agreed to buy Volkswagen's Brazil-based truck and bus business in a move that will let it expand into fast-growing South America, MAN said on Monday.
- Reuters
- Published: 23:57 December 15, 2008
Frankfurt: German industrial conglomerate MAN has agreed to buy Volkswagen's Brazil-based truck and bus business in a move that will let it expand into fast-growing South America, MAN said on Monday.
It gave no purchase price for the business, which it said had an enterprise value of 1.175 billion euros ($1.58 billion).
The transfer is supposed to take effect on January 1, 2009.
The deal marks movement toward a three-way truck deal that analysts expect to emerge among MAN, VW and Scania.
Meanwhile, Volkswagen said it expected the transaction, which allows it to focus on passenger cars and light commercial vehicles, to close in the first quarter of 2009.
Shares dip
VW said its 29.9 per cent stake in MAN would let it and its shareholders benefit from synergies the deal generates. MAN shares fell 3.2 per cent and Volkswagen was up 0.9 per cent by 1328 GMT, while the German blue-chip DAX index rose 1.3 per cent.
Volkswagen Truck & Bus, Brazil's largest truckmaker, has been making commercial vehicles in Brazil since 1996.
It sells vehicles primarily in Latin America and South Africa and delivered about 47,000 trucks and buses in 2007.
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