Ipic sells stake in Ferrostaal

Germany's MAN and Abu Dhabi's International Petroleum Investment Company (Ipic) have agreed to sell their jointly-held unit Ferrostaal to Hamburg-based investor MPC, ending more than a year of wrangling over the unit.

MAN sold 70 per cent of Ferrostaal to sovereign wealth fund Ipic in 2009 for $698 million, but when it tried to sell the remaining 30 per cent to the state-owned fund via a put option in early 2010, Ipic refused a deal due to a bribery investigation and later sought to annul the original purchase agreement.

MAN said in a statement it would pay 350 million euros ($464.4 million) to buy back the Ferrostaal shares from Ipic, with MPC to then buy the unit from MAN for a price of up to 160 million euros.

Shares in MAN, a maker of trucks and large diesel engines, were indicated up 5 per cent in premarket trading, while Germany's benchmark index was seen 1.7 per cent higher.

"(The deal) may revive speculation that Volkswagen may increase (its) MAN stake," said a Frankfurt-based trader, who declined to be named.

Europe's largest carmaker Volkswagen in July clinched a 55.9 per cent stake in MAN, clearing the way for Volkswagen to start building its European truck empire.

"This settlement is the outcome of very good cooperation between both shareholders, and enables IPIC and MAN to finally put their differences aside," Ipic's Managing Director, Khadem Al Qubaisi, said.

"We are pleased to have been able to end the talks with Ipic on a conciliatory note with an outcome that is acceptable to everyone," said MAN's finance chief Frank Lutz.

The takeover will be carried out via MPC Industries, in which a Gulf-based investor has a minority stake, Handelsblatt said, adding that Schroeder did not name the investor.

Ferrostaal, a plant construction and engineering business, had in October agreed to pay a 149 million fine linked to the bribery charges.