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April 25, 2013 10:15 AM, EDT

Volkswagen Moves to Fully Control MAN as Companies’ Boards Approve Plan

Volkswagen AG moved closer to combining the three truck businesses it controls, with a deal to take full stewardship of MAN SE.

VW Chief Financial Officer Hans Dieter Poetsch said at the company’s shareholders’ meeting in Hanover, Germany, Thursday that two companies’ boards approved VW’s plan for a profit transfer and domination agreement at MAN, whose shareholders still need to vote on the proposal, Bloomberg News reported.

Under German law, a dominated company can become obligated to follow instructions from another entity that owns a strong majority. The two companies also can arrange to transfer profits or losses so they are equalized.

VW, which already owns 75% of Munich-based MAN’s voting rights, will offer 80.89 euros a share (about $105). Investors who do not accept the cash offer will receive a guaranteed annual dividend of 3.07 euros a share ($4).

The third point in the truck-making triangle extends from Germany into Sweden. VW owns 70.9% of Swedish truck maker Scania AB, and MAN owns 17.4%, for a combined total of 88.3%.

MAN, Scania and VW all make heavy-duty trucks. Reuters reported Thursday that if the three companies’ truck production were merged, the new entity would become the largest heavy-duty truck maker in Europe, surpassing Daimler AG and Volvo AB.