Frankfurt (Germany) (AFP) – Volkswagen said Thursday that it would sell a majority stake in its marine engine unit to a US investment firm for 7.4 billion euros ($8.4 billion) as the struggling German carmaker pushes ahead with an overhaul. Battered by fierce Chinese competition, weak demand in Europe and a troubled shift to electric vehicles, the 10-brand carmaker has seen its profits sink and is in the process of cutting 50,000 jobs in Germany.
Seeking to slim down its sprawling operations, Volkswagen has agreed to sell a 51 percent stake in Everllence, which makes ship engines as well as technology related to clean energy, to the US private equity group Bain Capital. VW said in a statement it would remain a major shareholder “in the medium term” with a 49 percent stake.
“We are systematically driving forward the transformation of the Volkswagen Group and creating competitive structures,” said VW’s finance chief Arno Antlitz. The group aims to “reduce the complexity of its structures, streamline its management, strengthen its financial position and increase its financial flexibility,” he added.
No decision has yet been taken on the use of the proceeds from the sale, said the company, whose car brands also include Audi, Seat and Skoda. The Financial Times reported there was a bidding war for the stake in Everllence, with Bain Capital seeing off rival private equity groups including CVC and EQT.
Safeguards for Everllence’s five German sites have been agreed as part of the deal, with compulsory redundancies ruled out until the end of 2030, VW said. The sale is subject to the completion of consultations with staff representatives and regulatory approvals, and is expected to be finalized by the end of 2026. Everllence has more than 16,000 employees worldwide and last year generated revenues of 4.9 billion euros.
© 2024 AFP
