October 27, 2006 11:20 AM, EDT

Volkswagen Seeks Regulatory Approval to Increase MAN Stake

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olkswagen AG on Friday sought regulatory approval to increase its stake in German truck maker MAN AG to more than 25%, Bloomberg reported.

On Oct. 4, Volkswagen purchased a 15.1% stake in MAN as part of a strategy to forge a three-way alliance between itself, MAN and Swedish truck maker Scania AG, Bloomberg said. (Click here for previous coverage.)

MAN had viewed Volkswagen’s earlier purchase enthusiastically, believing it would help provide a solution for combining the three companies, Bloomberg reported.

Volkswagen also owns 34% of Scania’s voting rights, as well as 18.7% of its equity, Bloomberg said.

Volkswagen bought its current stake in MAN after the German truck maker offered to purchase Scania for $12 billion in September. (Click here for previous coverage.)

MAN has since purchased a 14.3% stake in Scania. (Click here for previous coverage.)

On Thursday, Bloomberg cited reports from Swedish newspaper Dagens Industri that said MAN may offer the chairmanship of the combined company to Investor AB, Scania’s second-largest shareholder, as a way to encourage the Swedish holding company to back an alliance between the three manufacturers.

Scania and Investor have so far resisted an alliance with MAN and Volkswagen, saying that the proposed deals undervalue the company, Bloomberg said.