The Fat MAN defense

Fiat mixtura – but which one

The fat man defense is a company strategy whereby an acquisition is made to increase the size of a business so that it is more difficult to acquire. Fiat mixtura is a Latin phrase that can be loosely translated as “let the integration be made.” But will an integration involve a fat MAN?

MAN is rumored to be interested in FIAT Industrial, or at least in the truck and bus business which is the greater part of it. A merger of these two businesses would increase the MAN truck and bus businesses and make it clearly bigger than Scania.

Volkswagen owns about 30% of MAN and has made no secret of the fact that it would like to merge MAN with Scania (the Swedish truckmaker in which VW has a 70% stake) and VW’s own vans business (VW Nutzfahrzeuge).

But what of a combined VW, Scania, MAN, Iveco truck business? Would VW be willing to pay more money for a fatter MAN? And would the EU competition authorities allow such a combination? Or, on the other hand, would it welcome another heavyweight to counterbalance Daimler?

At the same time, there are plenty of potential suitors for CNH (Case New Holland), the agricultural and forestry equipment maker that is also part of FIAT Industrial Рproviding the potential for a carve-out and sale of CNH that could be structured to provide a cash injection for the buyer of FIAT Industrial. And to make things even more interesting, some of these suitors are even interested in all of FIAT Industrial and might also compete with MAN as bidder.

When the show is over, for whom will the fat lady be singing?

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