Volkswagen Buys Scania – Possibly Setting Sights Even Higher
Volkswagen’s automotive diversity makes it the European General Motors. VW announced it has cleared the last anti-trust hurdle and will up its ownership of Swedish the truck manufacturer from 20.9% to a majority 68.6%. The total value of deal is worth 2.8 billion euros ($4.4 billion). In fact, the this merger may help set up VW for an even larger merger with Man - a commercial truck builder that is Scania’s next largest shareholder and is already partially owned by VW.
Although merger news is not usually exciting, especially commercial truck merger news, this is showing how large of an automotive juggernaut VW is. Just like GM, VW has many passenger car brands, and now this merger is a big step in expanding its already extensive commercial vehicle business. But unlike GM, Volkswagen is less centralized. According to Volkswagen Chief Executive Martin Winterkorn, "As with all of our group brands, Scania will retain its own corporate headquarters, its own culture and its own profile." Keeping all the companies out of Wolfsburg has worked well for VW so far, but as BMW proved with Rover in the 90s, it’s a tough one to get right.
While this is happening, Porsche is actively working with European regulators to finish acquiring a majority stake in Volkswagen. So, maybe it’s more appropriate say that Porsche is Europe’s General Motors.