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

VW, the largest investor in both firms, said it would sell its 34% share of Scania voting rights to MAN if the firm won support from other shareholders.

VW has already said it would consider merging its Brazilian truck business into a partnership with MAN and Scania.

Scania responded on Monday by offering shareholders a cash incentive.

Scania unveiled a special dividend of 35 kronor per share in an effort to make it more attractive for investors to hold on to their stock.

Analysts said the payment could force MAN to raise its bid again.

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

'Welcome decision'

In a statement issued on Sunday, the VW board said it would sell its stake in Scania to MAN if the latter was able to guarantee a stake of at least 71% of share capital and 56% of the voting rights in the Swedish truck maker.

VW also said it wanted the deal to be settled within the next four weeks.

But the carmaker's stance means that MAN would have to win backing for its bid from Scania's second biggest shareholder, Swedish investment group Investor AB.

"We welcome the decision of the Volkswagen supervisory board that it is in favour of combining the two companies," MAN said in response to VW's announcement.

"We continue to make an effort to hold open and constructive discussions with Scania."