MAN AG Buys Brazilian Volkswagen Truck and Bus for US$ 1.6 Billion

Volkswagen Truck and Bus MAN AG, a German-based company, announced this Monday, December 15, the purchase of Volkswagen Truck and Bus, headquartered in the municipality of Resende, in the state of Rio de Janeiro, in southeastern Brazil, which is going to become part of the group as of January 1st, 2009.

The announcement was made to the press by the president of MAN AG, Hakan Samuelsson, and by the president of Volkswagen Truck and Bus, Roberto Cortes, in the city of São Paulo.

The deal is worth 1.175 billion euros (US$ 1.604 billion) and involves truck- and bus-related operations by Volkswagen Latin America, which has been manufacturing buses and trucks in Brazil since 1996. In 2007, according to information supplied by the two companies, 47,000 vehicles were sold to Latin American countries and South Africa.

Cortes is going to remain at the helm of the company, as a direct subordinate to Samuelsson. The board members and remaining executives should also retain their positions. Truck models Constellation, Worker and Delivery, as well as the Volksbus buses, will continue to be sold under the Volkswagen brand. Technology and components by MAN should strengthen the current product line.

The presidents of the automakers stated that they envision excellent synergistic opportunities in the international commercial vehicle market, with positive developments for Latin America and Africa.

"Synergies in sales, cost and use of components are expected to be around 50 million euros (US$ 68.3 million)," said Samuelsson. "The entry of Volkswagen Trucks into the MAN group is a landmark in the strategy of internationalization for trucks and buses," he asserted.

According to him, Volkswagen is going to grant access to Latin American markets, which are the ones that grow the most in the segment presently, in addition to Brazilian leadership in truck sales. The Resende-based company employs 5,000 people at its factory.

Cortes, in turn, stated that not only does the deal guarantee the future of Volkswagen Truck and Bus, but it also creates the ideal conditions for its expansion.

"The evolution process was a natural one. The company emerged as a division of Volkswagen Brazil, then it became a business unit of Volkswagen Commercial Vehicles, headquartered in Germany, and now it is going to become one of the brands of MAN AG, which ranks among the world's leading truck and bus manufacturers," he said.

"We will have access to MAN vehicles' cutting-edge technology and benefit from the economy of scale and joint product development. Consumers in emerging countries, who have been our specialty for nearly 28 years now, will also benefit" he stated.

The MAN group, based in Munich and established 250 years ago, is one of the leading European manufacturers of commercial vehicles, engines and mechanical engineering equipment, with annual sales of around 100,000 units, revenues of 14 billion euros and over 50,000 employees worldwide.

According to the executives, the negotiation process for the purchase of Volkswagen by MAN started a few months ago and was not elicited by the world crisis.

According to Roberto Cortes, the crisis is not going to impact the announcement of investment totaling 1 billion reais (US$ 418 million) by 2012 in the company's operations either. The investment should be turned to expansion of production capacity with the implementation of a third shift at the company's factory, in Resende, Rio de Janeiro.

Anba

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