Scania and Volvo in EU competition probe

Europe's competition watchdog launched surprise inspections at trucking companies in Germany, Italy and Sweden on Tuesday over suspicions they may have formed an illegal cartel.

Scania and Volvo in EU competition probe
Scania CEO Leif Östling, July

Among firms inspected were Sweden’s Scania and Volvo, Germany’s Daimler and MAN, and Iveco in Italy.

The commission said it had “reason to believe that the companies concerned may have violated EU antitrust rules that prohibit cartels and restrictive business practices and/or the abuse of a dominant market position”.

The European Union’s executive branch did not reveal the names of the companies, following standard practice.

But Swedish company Scania confirmed it was among the companies investigated by the European Commission for “inappropriate exchange of information” and vowed to cooperate fully with the probe.

Scania’s head office in Södertalje as well as the head offices of its sales firms in the Netherlands, Belgium and Luxembourg were probed, said spokesman company Hans-Åke Danielsson.

“They have visited us today around lunch to get hold of our archives and so on as they do as usual,” he said. “It was not a dawn raid but rather an afternoon tea raid,” he laughed.

Volvo also confirmed it was involved. Spokesman Mårten Wikforss said “they are also examining our subsidiaries.” The Swedish giant owns Volvo trucks as well as Renault Trucks, Mack and UD Trucks.

German heavy truck maker and engineering group MAN said its headquarters had been searched and that it was cooperating with investigators.

“MAN has pledged its full cooperation to the European Union’s antitrust authorities in the antitrust proceedings against several European truck manufacturers,” a statement said.

MAN added that it “does not tolerate any breaches of compliance” and that it “does not currently expect customers to have suffered prejudice.”

Officials at rival Daimler, the world’s largest maker of heavy trucks, also confirmed it had been probed as did Iveco.

In September, British watchdog the Office of Fair Trading (OFT) said it had launched a probe into alleged price-fixing by major European truckmakers, including German giants Daimler and MAN, resulting in the arrest of one person.

British offices of Mercedes-Benz, owned by German vehicle giant Daimler, were also raided and MAN as well as Scania and Volvo said they had been asked to provide the OFT with information regarding the probe.

Unannounced EU inspections are a preliminary step and do not mean that the companies are guilty of anti-competitive behaviour, the commission said in a statement.

Fines can be as high as 10 percent of turnover.

Commission officials were accompanied by their counterparts from national competition authorities in the inspections.

There is no legal deadline to complete the investigation and the duration depends on several factors, including the complexity of each case and the extent to which companies cooperate with investigators.

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Volkswagen gets shares to take over Scania

Volkswagen, Europe's biggest carmaker, was set to take full control of Swedish truck manufacturer Scania on Tuesday after a small but crucial shareholder agreed to sell its shares.

Volkswagen gets shares to take over Scania
Swedish pension fund Alecta previously held out for a higher share price but agreed to sell its 2.04-percent stake in Scania, paving the way for Volkswagen to acquire full control the company.
On April 30, the German car giant said it lacked less than two percent more shares to reach its 90 percent goal, and thereby force the sale of the remaining shares.
"After new discussions with Volkswagen we have concluded that there will be no increase in their offer," Alecta said in a statement, referring to Volkswagen's refusal to pay more than 200 kronor ($30.5) per share.
In February, Volkswagen offered €6.7 billion ($9.3 billion) to acquire the nearly 40 percent of Scania it did not already own and to strengthen its position against its German competitors Daimler and the Swedish truck maker Volvo.
Scania's board of directors recommended shareholders not to part with shares at the price offered.
The offer expired on April 25th. However, confident that shareholders could be won over, Volkswagen extended its offer to May 16.
The German auto giant already owns truck and bus-maker MAN and bought into Scania in 2000.
It had previously said that it could make annual savings of €650 million through economies of scale by taking full control of the Swedish company.
The takeover is just the latest to hit Sweden's beleaguered vehicle manufacturing sector which has seen Chinese takeovers of the once iconic car brands Saab and Volvo.
Volvo Trucks announced more than 4,000 job cuts over the last six months and a voluntary redundancy scheme aimed to cut costs and increase profitability.