Edited Press Release
STOCKHOLM (Dow Jones)--Investor said Monday it has divested its holding inScania to Volkswagen .
The transaction clarifies the ownership situation in Scania and is a naturalstep following the ownership change in 2000, when Volkswagen became the leadshareholder.
Investor has reached an agreement with Volkswagen to divest its holding inScania for a price of SEK 200* per share.
The divestment will generate cash proceeds of SEK17.6 billion.
The Wallenberg Foundations** have reached corresponding agreements with Volkswagen regarding their holdings in Scania***.
Volkswagen will keep and develop Scania as a strong premium brand and willexercise its influence in the company with the objective of maximizing the long-term value for all shareholders.
Volkswagen does not foresee any further structural changes that wouldadversely affect the employees of the company and will support the management inexecuting the established strategy.
The continuity of Scania's management team has always been a priority for Volkswagen .
Furthermore Volkswagen intends to maintain the headquarters and theengineering competence centres in Sodertalje.
Volkswagen became the lead shareholder of Scania in Mar. 2000, when theplanned merger between Scania and Volvo was blocked by E.U. antitrustauthorities.
Volkswagen acquired 18.7% of the capital and 34.0% of the votes in Scania fromInvestor, which committed to remain a shareholder for at least two years.
Volvo remained a large shareholder in Scania until 2004, when it disposed itsshares, partly through the specially created company Ainax.
In 2005 Scania acquired Ainax, which was subsequently liquidated.
In connection with MAN's bid for Scania in Sep. 2006, which was withdrawn in Jan. 2007, MAN became a shareholder in Scania.
MAN Monday owns 13.2% of the capital and 17.0% of the votes.
Following the waiver from the mandatory bid rules that Volkswagen received in Feb. 2007, Volkswagen has increased its holding in Scania to 20.9% of thecapital and 38.0% of the votes.
Moreover, Volkswagen owns 28.7% of the capital and 29.9% of the votes in MAN.
During the last year, Investor, the Wallenberg Foundations and Volkswagen havehad in-depth discussions regarding the alternatives to clarify the ownershipstructure in Scania.
In these discussions, Volkswagen has stated a strong interest to become amajority shareholder in Scania.
The current market valuation of Scania, including the distribution of SEK10billion during the spring 2007, is approximately 40% higher than MAN's bid.
Investor owns 88,027,028 A-shares in Scania representing 11.0% of the capitaland 20.0% of the votes.
Closing of the transaction is subject to customary antitrust clearance.
In line with our communicated strategy, our ambition is to use the proceeds toexpand Operating Investments, strengthen ownership in identified CoreInvestments and make additional investments in Private Equity.
The company said given the investment opportunities available in the market,it believes that investments will create more attractive longer term value thanbuying back shares.
The strategy remains to increase the portion of unlisted investments, giventhe attractive return potential of that sector.
"We know Scania and its potential well through our long-term ownership. Wedecided therefore to reject MAN's bid and to develop the company standalonetogether with Volkswagen . Our decision has created considerable value for allScania shareholders. We believe this is the best solution for Scania. Thetransaction is also motivated by the fact that it is inconsistent with ourstrategy to be a shareholder with limited influence in a company with anindustrial shareholder in a lead position. Through the divestment we alsocrystallize additional value for our shareholders," said Borje Ekholm, Presidentand CEO of Investor AB .
*) The purchase price will be adjusted for any distribution from Scania to itsshareholders (proposed in total SEK 12.50/share for the fiscal year 2007) andcarries an interest component until closing. Investor will also be compensatedif Volkswagen acquires or divests shares in Scania at a higher price during afourteen month period.
**) The Knut and Alice Wallenberg Foundation, Marianne and Marcus WallenbergFoundation and Marcus and Amalia Wallenberg Foundation.
***) On Nov. 17, 2006, Investor and The Wallenberg Foundations announced acooperation agreement regarding their investments in Scania.
(END) Dow Jones Newswires 03-03-08 0155ET Copyright (c) 2008 Dow Jones & Company, Inc.
