AG says it will sell its heavy-truck business in Brazil to Munich-based MAN AG for €1.175 billion ($1.614 billion).
MAN’s acquisition ofCaminhoes e Onibus Industria e Comercio de Veiculos Comerciais Ltda. (VWCO) is expected to be completed in first-quarter 2009.
The sale will allow VW to focus its involvement in the truck business on its existing 69% stake in Scania AB and 29.9% holding in MAN, as well as its own light-commercial-vehicle business, which is not affected by the transaction.
Established in 1981, VWCO produces trucks and buses for developing countries and has become the largest truck maker in Brazil. The product portfolio comprises medium- and heavy-duty trucks as well as urban buses and long-distance coaches.
In fiscal 2007, the manufacturer built about 47,000 vehicles exported to more than 30 countries.
VW Chairman Martin Winterkorn says the decision to sell is a “further logical step” for VW in the truck business and provides its Brazilian CV operations an attractive alliance with a leading truck maker.
“It is obvious VWCO and MAN complement each other’s activities very well and have significant synergy potential,” he says. “We are convinced that VWCO customers and employees will benefit from this step.”
Following the purchase, MAN will continue to conduct the VWCO business under the Volkswagen brand name.