MAN has withdrawn its hostile bid for Scania after Volkswagen dramatically withdrew its support saying it wanted a "friendly merger" or partnership. Scania says that the offer is now dead in the water.
The two sides had been talking but the move seems to scupper the deal.
Scania said in its statement: "The Board of Scania has previously said it was open for discussions provided MAN withdrew its hostile offer. Such discussions must however build on industrial and commercial logic"

MAN's statement says: Discussions between Volkswagen, Investor and MAN have shown that there is an industrial logic behind a combination of MAN AG, Scania AB and Volkswagen Heavy Trucks. It is however not possible to achieve such a combination by way of the current Offer by MAN for Scania which is due to close on 31 January 2007 given that it has been rejected by both Volkswagen and Investor.

In light of this, MAN has decided not to amend the terms, conditions or timing of its Offer. As a consequence MAN will seek the approval of the Swedish Securities Council to withdraw the Offer as it is clear that the conditions of the Offer will not be met by 31 January.

As a shareholder of Scania, MAN is therefore looking forward to entering into further discussions during 2007 to seek a friendly combination of MAN AG, Scania AB and Volkswagen Heavy Trucks.

At the same time MAN will continue to focus on developing its present businesses and to explore other opportunities to achieve greater efficiency through scale thereby increasing value to our shareholders.