German truck-maker MAN has confirmed that it has withdrawn an offer to Abu Dhabi’s IPIC to settle the ownership of plant company Ferrostaal.
MAN sold 70% of Ferrostaal in 2009 to IPIC in a $650 million deal. The Abu Dhabi company was due to buy the remaining 30% via a ‘put option’ but refused to complete the transaction when an investigation into the company’s deals stretching back to the 1990s was launched in Germany.
As the investigation progressed, IPIC sought to annul the original purchase agreement. PMV understands that IPIC has now rejected an offer by MAN for an out of court cash settlement.
According to the Dow Jones Newswires, MAN is confident that a resolution will be found via arbitration.
“We have withdrawn our generous compromise offer for good after IPIC’s rejection,” the spokesman told Dow Jones Newswires. “MAN has a secured legal position and expects a positive outcome of the arbitration proceedings.”
MAN’s announcement comes following news that German prosecutors have charged two former managers of Ferrostaal with “joint bribery of foreign public officials in international business relations” in connection with submarine sales.
The Munich prosecutors’ office said in a statement on Monday that the pair were being investigated for paying money to
middlemen who facilitated contact with officials in Greece and Portugal.
“To receive contracts to supply submarines to Greece and Portugal, more than 62 million euros ($89.7 million) were paid between 2000 and 2007,” said the statement.
While the German court is expected to determine whether Ferrostaal will pay a fine in relation to any benefits of getting the submarine contracts, according to M M Warburg analyst Marc-Rene Tonn, the legal proceedings could clear the way for MAN and IPIC to settle their differences. It would be logical to assume that a resolution could lead to the MAN/Scania merger, and the creation of the world’s largest truck maker.
“It takes a while until the judicial makes a ruling, but in principle this is positive,” he told Thomson-Reuters’ Trust Law service.
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