UPDATE 4-Truck alliance looms as MAN, Scania and VW talk

* MAN, Scania, VW in talks over a technical cooperation

* Equity stakes “not on any agenda whatsoever” – MAN CEO

* MAN Q1 oper profit 128 mln eur vs 138 mln eur forecast

* MAN, VW prefs and Scania B shares close over 5 pct higher

(Adds comments from MAN CEO and VW CFO)

By Christiaan Hetzner

FRANKFURT, April 29 (BestGrowthStock) – Truckmaker MAN SE (MANG.DE: )
aims to forge closer ties with Scania (SCVb.ST: ) and Volkswagen
(VOWG_p.DE: ), in a trucks alliance better able to compete with
market leaders Daimler (DAIGn.DE: ) and Volvo.

Apparently bowing to industry kingpin Ferdinand Piech,
chairman of both MAN and VW and on a mission to create the
world’s biggest automotive empire, MAN Chief Executive Georg
Pachta-Reyhofen changed tack on prospects for an alliance.

“At the annual general meeting I said that there were no
concrete projects currently planned. Today I would formulate
that differently,” he told journalists in a conference call on
quarterly results on Thursday.

Piech corrected Pachta-Reyhofen at MAN’s shareholder meeting
to make clear he would not let the MAN-Scania standoff continue.

Relations between the two truckmakers have been frosty ever
since former MAN CEO Hakan Samuelsson launched a hostile
takeover bid for Scania in late 2006 that ultimately failed.

“MAN, Volkswagen and Scania are in agreement today that a
more intensive technical cooperation between the companies in
the area of products offers advantages for all partners,” said
Pachta-Reyhofen.

The MAN CEO said the talks, which were taking place at the
“highest level” and included his direct participation, would
result in a concrete cooperation between the three companies.

“Equity stakes are not on any agenda whatsoever, at least
not that I’m aware of. I would like to emphasize that we are
talking purely about a technical cooperation,” he explained.

Both MAN’s stock and Scania B shares closed up nearly 5.2
percent on Thursday, while VW preference shares gained almost
5.6 percent. VW also posted final first-quarter results that
highlighted a recovery at its core VW brand. [ID:nLDE63R2L9].

Volkswagen finance chief Hans Dieter Poetsch also tried to
suppress speculation over the depth and breadth of an accord
during a subsequent conference call: “The cooperation is taking
place (but) possibly not fully fulfilling external
expectations,” he said.

MAN’s Pachta-Reyhofen skirted a question about whether his
company still believes the 500 million euros in added earnings
it cited in its hostile bid for Scania was still a valid
estimate for a potential tie-up.

“I don’t want to quantify the synergies today. I think we
have not gotten that far,” he said.

Scania CEO Leif Ostling said on Wednesday that MAN had now
joined working groups set up by Scania and Volkswagen two years
ago to improve cooperation. [ID:nLDE63R0HG]

Volkswagen has nearly 30 percent of MAN’s votes and owns
nearly 71 percent of the votes in Scania.

BRAZIL BOOMING

MAN said operating profit would increase in 2010 over the
504 million last year, after posting quarterly earnings that
showed a 28 percent increase to 128 million euros, just short of
market expectations.

Growth was driven entirely by its Brazilian truck business,
bought from Volkswagen for nearly 1.18 billion euros in equity
and debt. This contributed 70 million euros – profit which was
missing a year ago since it was first consolidated at the very
end of the quarter.

“After really good results from its competitors, today’s MAN
figures are slightly disappointing from our point of view,” DZ
Bank auto analyst Michael Punzet told clients.

Market leader Daimler Trucks (DAIGn.DE: ) has nearly tripled
its forecast for operating profit this year while No.2 Volvo
(VOLVb.ST: ) surprised with its first-quarter results after
sweeping cuts. [ID:nLDE63I2DW] [ID:nLDE63M04Y]

A 10 percent drop in revenue and factories churning out
fewer vehicles meant Nutzfahrzeuge swung to a 57 million euro
operating loss. New truck orders at the unit rose by 31 percent
to 12,243 vehicles, however, signalling an improvement ahead.

“The first signs of a recovery in the European commercial
vehicles market are set to continue at a low level in 2010,” MAN
said in its quarterly report, steering clear again of giving a
concrete group forecast for results this year.

Demand in Europe so far has been slow to recover since heavy
truck sales halved last year, but monthly industry data showed
the market grew in March for the first time in almost two years.
[ID:nLDE63Q06U]

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(Editing by David Cowell and Erica Billingham)
($1=.7508 Euro)

UPDATE 4-Truck alliance looms as MAN, Scania and VW talk