Volkswagen shares plunge on outlook

Monday 24 February 2014 11.33
Volkswagen plans to buy the rest of Swedish trucks division Scania
Volkswagen plans to buy the rest of Swedish trucks division Scania

Shares in Volkswagen plunged today after the group on Friday night toned down its 2014 operating profit outlook.

It also announced plans to buy the rest of Swedish trucks division Scania in a deal partly financed by a capital increase.

Shares in the Europe's biggest car maker fell as much as 7.5% in early trade.

Volkswagen plans to buy out minority shareholders of Scania for €6.7 billion as it aims to jump-start a stalled eight-year effort to forge Europe's biggest truckmaker.

It will sell preferred shares for up to €2 billion, issue hybrid capital of up to €3 billion and draw another €2 billion from its ample cash reserves.

The company also said its 2014 operating margin could be within a range of 5.5-6.5%, compared with 5.9% last year.

Keywords: volkswagen, scania