Old Mutual increases stake in Skandia

Anglo-South African insurer Old Mutual has said that investors representing more than 89.5 percent of shares in Swedish insurer Skandia had accepted its hostile takeover bid.

Old Mutual had originally targeted an acceptance level of 90 percent which would allow it to remove the listing of Skandia shares on the Stockholm stock exchange.

On Tuesday, the company nominated its finance director Julian Roberts to be chief executive of the Swedish insurance group.

Roberts will resign as group finance director of Old Mutual, and will replace current Skandia chief executive Hans-Erik Andersson, if the appointment is approved at Skandia’s extraordinary general meeting on February 21.

Roberts would quit also his non-executive directorships of Old Mutual’s

separately listed subsidiaries, but would continue as an executive director on its board, Old Mutual said in an official statement.

Old Mutual boss Jim Sutcliffe will take over as Skandia’s chairman.

What the new executives will mean for Skandia’s business is so far unclear. Old Mutual has made it clear that it wants to make economies of scale, and Sutcliffe has said that he wants to sell Skandiabanken, Skandia’s internet banking arm. He has also spoken in favour of moving IT and technology departments to South Africa, where costs are lower. There are also questions about the role for Skandia’s UK operations following the takeover.

The group announced on Tuesday that the deadline for its €4.8-billion

offer had been extended to March 14.

Last September, Old Mutual lodged a hostile offer of 43.60 kronor per Skandia share, valuing Skandia at 44.9 billion kronor.

The bid by Old Mutual, creates one of the biggest insurance groups in Europe, is aimed also at reducing the Old Mutual’s dependence on the South

African market.

AFP/The Local


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."