MAN snaps up ERF
Page 7
If you've noticed an error in this article please click here to report it so we can fix it.
• by Colin Barnett and Brian Weatherley German truck manufacturer MAN has ended months of speculation by buying ERF from parent company Western Star for some 2110m—the Canadian firm paid just 227.4m for ERF in 1996.
The Sandbach company, which contributed a turnover of .2200m and sold about 3,000 trucks during 1998/99, was bought for 265m in cash with the rest in assumed debts.
As part of the deal Western Star is buying MAN's truck and bus import business in Australia and New Zealand for 28.5m.
According to ERF managing director John Bryant, "it's business as usual".
The takeover won't stop the company's plans to build a 225m assembly plant at Middlewich, either. "It goes ahead," says Bryant, who stays on as boss but will continue to work with Western Star's North American bus builder Orion until the end of the year.
ERF's agreement to assemble Isuzu light-middleweights is also unaffected by the deal, Bryant reports, and the corn
pany will continue to supply cabover tractors to Western Star for sale in Australia and New Zealand.
FRE users are bound to wonder how the sale will affect ERF's relationship with proprietary engine suppliers, and in particular Cummins, which has been at the heart of its Fuel Duel campaigns.
The MAN press release speaks of a "natural integration of components from the MAN series production" leading to "substantial synergies".
However, Bryant explains: "It doesn't necessarily mean new power units but doesn't necessarily mean Cummins engines either. There are two ways of doing things but we've no intention of only having a 'badge' difference."
According to Bryant there will be a new product this year—taken by CM to mean a new heavy tractor—"with some components supplied by MAN, but how many components, and what, has yet to be finalised".
Bryant is adamant that the deal "is good for the company and for Western Star shareholders. We are now a member of a European company with all the further benefits."
• The acquisition will not effect ERF's agreement with Turkish manufacturer BMC, which supplies its EP rigid.