A deal would link-up Europe's third and fourth biggest truck firms

MAN's offer now values Scania at 10.2bn euros ($12.8bn; �6.9bn), up from the 9.6bn euros valuation it had rejected in September.

Carmaker Volkswagen (VW) will be a key role in any deal - it has an 18.7% stake in Scania and a 15% share in MAN.

Europe's biggest carmaker has urged the two companies to bury their differences and merge their businesses.

VW has already indicated that it would consider integrating its own Brazilian truck business into a three-way partnership with MAN and Scania.

A combined MAN and Scania would become Europe's largest truckmaker.

Profits up

MAN had earlier said it was prepared to end its hostile bid in return for amicable talks with Scania.

"Our invitation was not taken up. As a result we have taken this step to increase the likelihood of a combination," said MAN chairman Hakan Samuelsson in a statement issued on Thursday.

"By acquiring a larger stake in Scania we are responding to the desire of the majority of Scania shareholders to see Scania combined with MAN."

The latest purchase of shares gives MAN an 11.5% equity stake in Scania, and a 14% share of voting rights.

On Thursday, Scania brought forward its third-quarter earnings report to help counter the MAN bid.

New EU pollution rules had boosted sales of new trucks and helped to lift net profit by 55% from the same period in 2005, to 1.28bn kronor (�93m; $173m).