Volkswagen acquires E95 bus maker Scania

March 10, 2008

BY Brian Warshaw in Fontaines, France

Web exclusive posted March 12, 2008 at 3:52 p.m. CST

On March 3, German manufacturer Volkswagen AG acquired a controlling interest in Scania AB, the Swedish manufacturer of E95 ethanol-powered buses.

The future of Scania's line of ethanol-powered buses remains to be seen. For now, Volkswagen said the automaker "will keep and develop Scania as a strong premium brand."

Volkswagen has been the leading shareholder in Scania since 2000, after the European Union antitrust authorities blocked a merger between Scania and Volvo. If last week's acquisition is approved by regulators, Volkswagen will own 21 percent of the capital and 69 percent of the voting rights in Scania.

Volkswagen also owns nearly 30 percent of the voting rights in truck manufacturer MAN AG, which has 17 percent voting rights in Scania and 13.2 percent of Scania's capital.

The corporate maneuvering could affect the future of a second clean automotive technology. While Scania makes ethanol-powered buses, MAN is developing a proton-exchange membrane fuel-cell technology that uses hydrogen for fuel. Fuel cells have near-zero emissions, which make them particularly suitable for use in urban areas where city buses operate.

In a separate move March 3, Porsche Automobile Holding SE increased its stake in Volkswagen to more than 50 percent.

Both acquisitions are subject to approval under regulatory and antitrust laws, which will take several months.

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