Several private equity firms are reportedly exploring the potential acquisition of a majority stake in Volkswagen’s heavy diesel engine unit Everllence.
Sources familiar with the situation told Bloomberg that EQT has been weighing a possible offer together with Singapore sovereign wealth fund GIC.
Other parties said to be considering bids include CVC Capital Partners, Advent, Bain Capital, KPS Capital Partners and Clayton Dubilier & Rice.
Japanese trading house Mitsui & Co. may also have an interest.
The news comes as the German carmaker continues to assess options for divesting non-core assets.
The sources indicated that Everllence could be valued in the region of €5bn ($5.80bn) to €6bn if a transaction goes ahead.
Indicative, first-round offers are expected by 12 February, they said.
Discussions are still in progress and there is no certainty that Volkswagen or the interested investors will proceed with a deal.
A spokesperson for Volkswagen confirmed to Bloomberg that the group is reviewing strategic alternatives for Everllence but declined to provide further detail.
The possible divestment comes as Volkswagen works to boost profitability and simplify its operations amid technological change, weaker demand in several markets and growing competition from rivals including Tesla and BYD.
Everllence, which produces engines for ships as well as turbines for power generation, was previously known as MAN Energy Solutions.
In December, Volkswagen’s Audi division agreed to sell its controlling stake in Italdesign Giugiaro to California-based technology group UST, with Lamborghini retaining a significant interest.
Volkswagen has been advised on the Everllence process by Goldman Sachs Group and JPMorgan Chase.
The business generated earnings before interest and taxes of €337m on revenues of €4.3bn in 2024, according to Volkswagen’s annual report cited by Bloomberg.
Earlier this month, Volkswagen Group and Qualcomm Technologies announced a Letter of Intent (LOI) for a long-term supply agreement to deliver advanced infotainment and connectivity capabilities powered by Qualcomm’s Snapdragon Digital Chassis solutions.
