Volkswagen’s rumored Paccar purchase: Does it make sense for VW?

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Updated Jul 9, 2014
Volkwswagen owns the European truck maker MAN.Volkwswagen owns the European truck maker MAN.

Following rumors last week that European mega-manufacturer Volkswagen was poised to buy U.S. truck maker Paccar (owner of Peterbilt and Kenworth brands), CCJ sister site Successful Dealer‘s Editor Jason Cannon broke down the ins and outs of a potential deal in a blog post published July 3, detailing what the acquisition would mean for Volkswagen and the truck market in general.

VW refuted the rumors Thursday, calling them “rubbish.”

Nonetheless, VW’s interest in Paccar makes sense, Cannon writes, as they’ve made no secret of their desire to become the world’s largest automotive company, and buying Paccar would certainly do that for them.

Volkswagen just last month sold $2.7 billion in stock to fund its acquisition of the European truck maker Scania, which VW will combine with its MAN brand to take on Daimler in the European market.

A purchase of Paccar would give VW another European truck maker, DAF, which the company likely would have to spin off and sell to someone else, Cannon writes.

Paccar, too, would come at a premium, as the company is profitable, and in any sale, its shareholders would be looking to get a bit more than what the company’s shares are currently selling at, Cannon writes in his blog.

There is, however, a U.S. truck maker VW could get at what Cannon calls a “steep discount” and without the hassle of a competing European brand: Navistar-International.

Cannon also notes the interesting histories between VW’s Andreas Renschler, who just left Daimler this year after a decade-long stint heading its global trucks division for a similar role at VW.

Click here to read Cannon’s full piece.