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. Last Updated: 07/27/2016

Talk of VW Bid Ups MAN Stock

FRANKFURT, Germany -- Shares in German trucks and engineering group MAN rose 8 percent Monday on reports that Europe's biggest carmaker, Volkswagen AG, wanted to buy its core commercial vehicles business.

Der Spiegel magazine said in a report published Monday that VW wanted to beef up its trucks product range by buying the MAN unit.

The magazine said VW chief executive Bernd Pischetsrieder had held discussions about a deal with Paul Achleitner, finance chief of insurer Allianz, a major shareholder in MAN.

Volkswagen and MAN declined to comment on the report, while Allianz officials were not immediately available.

Industry sources said they thought it unlikely that any deal between VW and MAN was imminent, noting that the latest speculation was not new and that the companies regularly spoke to each other.

"These guys meet frequently. After all they're in the same business," one industry source said.

VW currently offers only small and medium-sized trucks and has indicated in the past it could be interested in expanding its range to include larger commercial vehicles such as those made by MAN.

Consolidation in the sector is widely expected when Sweden's Volvo, the world's second-biggest truck maker, sells its 45 percent stake in rival Scania, which it has to do by early next year for regulatory reasons.

VW, which owns around 18 percent of Scania's share capital and 34 percent of its voting rights, is seen as a possible buyer of the stake, although Pischetsrieder has indicated he is not interested in buying more and some industry watchers expect VW rather to sell off its existing holding.

Analysts said a deal between VW and MAN would seem to make more sense for MAN -- which makes marine diesel engines, plant equipment, printing machinery and space rocket components as well as trucks and buses -- than for VW.

"If VW buys into MAN it would be the beginning of a breakup for MAN. VW would first have to buy everything and then sell off everything other than the trucks unit. That would seem to be cumbersome and expensive," one German industry analyst said.