No, thanks: Scania exec says firm can go it alone

HANOVER: Scania, which this week rejected a e9.6bn ($12.2bn) takeover offer from rival MAN, can continue independently and stay profitable, one of its executives said on Wednesday. “I’m convinced Scania can continue growing organically, as we have over the years,” Scania chief technology officer Hasse Johansson told Dow Jones Newswires in an interview at the international truck show in northern Germany.

At the same time, the company is still examining potential co-operation pacts with other companies so as to increase sales volumes outside Europe, particularly in Asia.

“So far, we’re doing very well as an independent company,” Scania board member Peggy Bruzelius said over telephone. “But we are constantly looking at possible pacts,” she said. A unanimous Scania board, and the company’s main holders Volkswagen and Investor , on Monday rejected MAN’s takeover bid.

Munich-based MAN, Europe’s third biggest truck maker, offered e48 ($60.74) a share for Scania in a bid aimed at forming Europe’s largest, and the world’s third biggest, truck maker. MAN’s move was widely expected by analysts, who had predicted a fresh round of consolidation to narrow the gap between the two truck giants, DaimlerChrysler AG and AB Volvo, and their smaller peers.

Some industry participants have argued that Scania will have to tie up with another company to boost sales volumes to keep up profits in the future, when stricter emissions standards will demand more costly investment in technology. But the company is still Europe’s most profitable truck maker, with an operating profit margin of 11.3% in the second quarter.

It expects deliveries to rise sharply this year and says the effect on pre-buying of trucks, ahead of new emission regulations in Europe in October, to be smaller than expected earlier this year. Scania’s research and development costs make up around 4% of sales. “We have kept R&D costs at around 4% of sales in 40 years and already have concepts developed to meet the emission reduction standards required up to the year ‘15,” Mr Johansson said.