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SKANDIA

Skandia: 62 percent support for OM bid

Anglo-South African insurer Old Mutual said on Tuesday that investors holding 62.5 percent of the shares in Swedish rival Skandia had accepted its hostile takeover bid.

The deadline for the 4.8-billion-euro (45 billion kronor) offer had been extended to January 12, 2006, the group added in an official statement.

Old Mutual, which launched its cash and shares bid for Skandia in September, had said it wanted to win the support of investors holding at least 50 percent of the Swedish insurer’s shares.

“I am delighted that holders of a majority of shares in Skandia have recognised the exciting potential of combining our two companies,” said Old Mutual chief executive Jim Sutcliffe.

He added: “I look forward to welcoming every member of Skandia’s staff around the world to the Old Mutual family”

A further statement on the total level of acceptances would be made on Wednesday, the group said.

On December 1, Old Mutual slashed its target level of shareholder support in the bid, which is being resisted by Skandia’s board, to 50 percent from 90 percent.

The group’s own shareholders have overwhelmingly backed the bid which is aimed at reducing the insurer’s dependence on South Africa and at creating the eighth-biggest insurance group in Europe.

In September, Old Mutual lodged its offer for 43.60 kronor per Skandia share, valuing Skandia at 44.9 billion kronor.

The offer deadline was initially set for November and had been extended to December 16.

AFP

TAKEOVER

Scania review board dissects Volkswagen bid

The independent committee looking at Volkswagen's take-over bid of Swedish truck giant Scania began its work on Tuesday, stating promises that headquarters would remain in Sweden were paramount.

Scania review board dissects Volkswagen bid
IF Metall Union representative Johan Järvklo sits on the independent review board. File: TT

Åsa Thunman was appointed chairwoman of the committee, which has invited financial consultants from Deutsche Bank and Morgan Stanley as well as legal advisors from Swedish law firm Mannheimer Swartling to assist them in their appraisal.

Thunman said in a statement that the committee would look at whether the $9.2 billion bid was in the best interest of Scania shareholders.

The effect on Swedish industry would also be considered, underlined committee board member Peter Wallenberg Jr.

"It has noted that Volkswagen does not foresee any significant changes with regards to Scania and that Scania’s headquarters and its development centres will remain where they are today," Wallenberg Jr. said. "These matters are of course of importance to the company and for Sweden.”

At the plant in Södertälje, employees have been busy discussing the bid. Assembly line worker Ahmed told The Local that his colleagues did not fear that production would be relocated to Germany.

"They couldn't possibly move all these machines and equipment," Ahmed, which is not his real name, told The Local on Tuesday. "But everyone on the floor has been discussing the offer."

Volkswagen tabled their $9.2 billion bid to swallow up Scania last Friday. It already owns 89 percent of Scania's voting rights and 62.6 percent of the company, with VW eager to secure the nearly 40 percent they do not own. The takeover has encountered resistance from two of Scania's minority owners, however. Both insurance outfit Skandia and pension fund AP4 have expressed reservations about selling up to Volkswagen.

“Scania’s prerequisites to maintain its leading position are better as a listed company than as a subsidiary in a larger group. Skandia doesn't intend to accept the offer," Caroline af Ugglas, head of equities at Skandia, told Bloomberg over the weekend.

Scania, which was founded in 1891 and has operations in more than 100 countries, boasts 38,600 employees. Around 16,000 work with sales and servicescross the company's subsidiaries, and over 12,000 work in production units. The company has headquarters in the Swedish town of Södertälje, where almost 6,000 employees work. The headquarters also hosts the research and development operations, with 3,300 employees.

"Changing owners won't make any difference to us in the near future," assembly line worker Ahmed said. "But we do wonder if the rules will change later on." 

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