West Germany: Surprise Bid

With Fritz-Aurel Goergen, the boss of West Germany's Henschel Works, awaiting trial on charges that he cheated the government in a $16 million tank deal, businessmen have been wondering what would happen to the vast heavy-equipment firm he made one of Germany's most profitable. Last week Essen's Rheinische Stahlwerke ended the speculation by making a bid to purchase Henschel, a move that would catapult the enlarged firm to third place among Germany's coal and steel giants (after Thyssen and Krupp).

Rheinstahl sells steel to Henschel, whose production of heavy trucks complements Rheinstahl's lighter line. Most important, Henschel is at a crossroads where it needs both larger injections of cash and a new guiding light to replace the ailing Goergen. Fritz-Aurel Goergen would be delighted to sell out to Rheinstahl, and in fact began merger talks with Rheinstahl Boss Werner Sohngen more than a year ago, but he owns only 53.9% of the stock. Most of the rest is in the hands of such U.S. investors as Morgan Guaranty Trust, Wall Street's Burnham & Co. and Financier Joseph R. Nash, who together paid $10 million for their stock. So far, Rheinstahl and the U.S. interests have not agreed on the sale, and at week's end, Sohngen warned that "without Goergen, the situation at Henschel could only get worse." He set an Aug. 7 deadline for Henschel's minority stockholders to make up their minds.