The carve-out will reshape VW’s industrial portfolio and aims to unlock funds for core operations. Regulatory and worker approvals remain key hurdles this year.
On June 24, Volkswagen agreed to sell the Everllence diesel division to Bain Capital for about €7.4 billion, which will bring the group a significant cash inflow and support after a series of cuts in the automotive business.
The expected leveraged transaction could become one of the largest carve-outs in European industry this year. The company aims to unlock funds and focus on the most profitable areas after reduced activity in the core automotive part of the business.
“More gradual 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, this will allow us to focus even more on our core business.”
– Oliver Blume
Structure of the deal and the future of the assets
Volkswagen has struck an exclusive agreement with Bain to sell 51% of Everllence’s shares, while in the mid-term the company will remain a significant shareholder with a 49% stake.
Bain competed with CVC and EQT; EQT was part of a consortium with Porsche SE and Qatar.
Porsche SE controls 53.3% of Volkswagen’s voting shares, while Qatar owns 17% through its sovereign wealth fund.
The unit, formerly known as MAN Energy Solutions, manufactures diesel engines for shipping, but also sees growth potential from demand for generators for data centers and opportunities in the field of artificial intelligence.
The deal requires employee consent and overcoming regulatory hurdles that Volkswagen plans to clear by the end of the year.
Under the deal, production facilities in Augsburg, Oberhausen, Berlin, Hamburg, and Ravensburg will remain under the new ownership structure at least until the end of 2030.
As of May 31, the book value of Everllence on Volkswagen’s balance sheet was around €3.4 billion.
They expect that this deal will mark an important step in portfolio restructuring and will allow Volkswagen to strengthen its financial flexibility, focusing on its core business after the group’s substantial downsizing.