MAN -Scania Bid: now the Deaththroes.

Looks like the MAN Scania bid has finally died the death. In truth, it’s been coughing up blood in the hallway ever since Bernd Pischetsrieder received the surprise elbow from VW a month or so back, but the rejection by VW of the MAN offer – it is Scania’s biggest shareholder – has finally put the lid on things.

MAN still seems to hold out a bit of hope that things might work out to Munich’s wishes: “Our offer still stands until Jan. 31,'' Andreas Lampersbach, an MAN spokesman, said in a Bloomberg interview. “We have from the very beginning sought a friendly solution.'' Exactly what VW itself seemed to want as well.Where does this leave the three parties? Presumably Leif Östling is feeling fairly smug at present – he’s seen off a serious bid for Scania – but now he has to deliver on his assertion that the Swedish OEM has greater growth potential as an independent organization. Verticalisation is where it’s at c.2007, but the handmaiden of vertical integration is scale. Über-OEMs such as DaimlerChrysler and Volvo have scale; Scania does not. This has to be an issue moving forwards, and so we assume that Scania’s relationship with Hino will be extended. Despite Östling’s protestations to the contrary, Scania is trying to punch well above its weight, and we can’t see how it can continue to do so post Euro 5.If Leif Östling is looking smug, MAN Chief Executive Officer Hakan Samuelsson is likely to be working on his resume. Samuelsson has gone out on a limb, and it seems to have broken off, dumping the affable Swede in a heap. It seems unlikely that he can survive such a public humiliation, and we assume that he’ll be heading elsewhere.But one thing might save him. Volkswagen’s rationale behind its part in this adventure is simple. It has an operation in Latin America, but nothing else worth a mention in the heavy CV business. Samuelsson’s argument for a MAN-Scania merger is founded in the need for scale and synergy. That applies equally to VW’s enthusiasm. Hence the market rumours suggesting that, once the dust has settled, VW mill make a pitch for MAN.This makes a bit of sense. MAN has no footprint in Latin America, and VW is reliant upon a lot of Tier 1 input for its heavy CV range. MAN-VW could offer sufficient scale benefits to be worthwhile, and, from VW’s perspective, could rid the carmaker of a growing problem. On that note, it’s interesting to see that Wolfgang Bernhard, who has overseen the VW brand since May 2005, is to leave the company on January 31st.Will VW make a bid for MAN? Or will MAN make an offer for VW’s truck business? One or other seems inevitable, and our money is on the former. VW’s stake in Scania isn’t going away, and so maybe a combined German truck operation would be in a better position to go again for Scania in the future. Until then, we’ll have to find something else to talk about in the M&A arena. Paccar and Ashok Leyland anyone? Tata and Iveco?