Volkswagen Group has agreed to sell Everllence – its heavy duty diesel engine unit – to private capital firm Bain Capital. Several private equity firms were also in the running (including Blackstone), with VW seeking to free up cash as it embarks on further cost cuts.
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Under the exclusive arrangement with Bain, the Volkswagen Group is to sell 51 per cent of its shares in Everllence, and plans to remain a major shareholder with a 49 per cent stake in the medium term.
The envisaged transaction in the form of a leveraged buy-out generates proceeds of approx. 7.4 billion euros for Volkswagen. A decision on the use of the proceeds will be taken at a later date, the company said.
The new ownership structure is also intended to secure the next phase of growth for Everllence, a leading global manufacturer of large engines, turbomachinery and decarbonisation solutions.
Oliver Blume, CEO of the Volkswagen Group: “Over the past few years, Everllence has developed into a success story that we can be proud of. We realigned and strengthened the company following the acquisition in 2018. Today, Everllence is one of the world’s leading manufacturers of large engines, turbomachinery and decarbonisation solutions.
“Now is the right time to take the next step – to transfer the majority stake to a new, strong partner. We want to create added value for everyone with this step: leaner structures and processes will give Everllence the opportunity to achieve further growth in attractive markets such as data centers, the energy sector and shipping. At the same time, it will allow us to focus even more strongly on our core business.”
The transaction is subject to the completion of the information and consultation processes with employee representation bodies required by law in France and the other conditions and approvals required by the regulatory authorities. The aim is for these conditions, including regulatory approvals, to be met by the end of 2026.
The envisaged transaction is to significantly strengthen Volkswagen Group’s financial position as its transformation moves forward – at the same time, the company is streamlining its investment portfolio.
Arno Antlitz, CFO and COO of the Volkswagen Group, said: “We are systematically driving forward the transformation of the Volkswagen Group and creating competitive structures. This also includes the active management of our numerous companies and shareholdings. Following the conclusion of the envisaged transaction, Everllence will gain a strong partner in Bain Capital. Together we will continue to consistently align Everllence specifically to market requirements – thereby harnessing growth opportunities. In parallel with this, the Volkswagen Group will reduce the complexity of its structures, streamline its management, strengthen its financial position and increase its financial flexibility. Our shareholders can also benefit from this transaction in many ways: on the one hand, through the Volkswagen Group’s strengthened financial position; on the other, through participating in Everllence’s future value and growth potential.”
“The transaction lays the groundwork for the sustainable continuation and further acceleration of our successful growth trajectory,” said Dr Uwe Lauber, CEO of Everllence. “Bain Capital’s financial strength, strategic expertise and global network are expected to strengthen our position to drive innovation, scale up cutting-edge technology and tap into new markets. At the same time, we are committed to remaining a reliable partner for our customers – with the clear ambition of making key industries worldwide more efficient, successful and climate-friendly.”
Since its acquisition by the Volkswagen Group eight years ago, Everllence has been strategically realigned under the name Everllence (previously MAN Energy Solutions).
As part of the transaction, safeguards for the company’s German sites have been agreed: the sites in Augsburg, Oberhausen, Berlin, Hamburg and Ravensburg will be retained under the new ownership structure at least until the end of 2030. Compulsory redundancies are ruled out during this period.
