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Volkswagen Offers EUR80.89/share To MAN SE Shareholders

3/22/2013 12:17 AM ET

German commercial vehicles maker Maschinenfabrik Augsburg-Nürnberg or MAN SE (MAGOY) said Thursday that German auto giant Volkswagen AG (VOW.BE, VLKAY,VKW.L) has offered to buy the shares from minority shareholders for 80.89 euros per share.

The offer is part of Volkswagen's efforts to gain full control of MAN. However, the offer price represents a 7.1 percent discount to MAN's closing stock price on Thursday of 87.10 euros on Frankfurt's XETRA.

In June 2012, Volkswagen said it increased its share of voting rights in MAN to 75.03 percent, paving the way for a domination agreement to be put in place. Volkswagen and MAN said in early January 2013 that they plan to enter into a domination and profit and loss transfer agreement, with MAN as the controlled company, in order to create an integrated commercial group.

The merger with MAN will enable Volkswagen to emerge as the biggest producer of heavy trucks in Europe, ahead of Swedish automaker Volvo AB (VOLVY) and another German automaker Daimler AG (DDAIF).

MAN said Thursday that representatives of its executive board as well as the management of Truck & Bus GmbH, a wholly-owned subsidiary of Volkswagen, agreed that the domination and profit and loss transfer agreement will provide for a cash compensation offer of 80.89 euros to the minority shareholders of MAN.

Volkswagen has offered the amount of 80.89 euros for each common and preferred share. The amount is in accordance with the preliminary results of a business valuation and may change depending on the final outcome of the valuation.

MAN shareholders who will not accept the offer will presumably receive a guaranteed annual dividend of 3.07 euros per share.

MAN is scheduled to hold a general meeting on June 6, 2013 to approve the domination agreement. The deal also requires approval at the shareholders' meeting of Truck & Bus GmbH.

On Frankfurt's XETRA, Volkswagen shares closed Thursday's trading at 147.75 euros, down 1.25 euros or 0.84 percent on a volume of 141,382 shares.

MAN closed Thursday's trading at 87.10 euros, down 0.15 euros or 0.17 percent on a volume of 190,795 shares.

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by RTT Staff Writer

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