Volkswagen trucks division considers stock listing of unit
Frankfurt — Volkswagen’s trucks chief wants to take his division to "the next level" with the German motor vehicle manufacturer considering a stock listing to catapult the $37bn unit into the blue-chip ranks of Europe’s largest economy.
"An initial public offering is just one of the options, another is that we could issue our own bonds," Andreas Renschler, who oversees the Scania and MAN brands, said. "It’s ultimately a decision for our shareholders."
The world’s largest motor vehicle maker unveiled a sweeping overhaul on Thursday that included naming Herbert Diess as its new CEO. In the deepest revamp since the diesel-emissions scandal, key stakeholders also agreed to ready the trucks unit for potential access to capital markets.
Changing the unit’s legal status into a stock corporation "will help us avoid wasting time once we have a decision by our shareholders", Renschler said.
Economies of scale
An IPO of VW trucks would mark the next big transaction in Germany since Siemens Healthineers raised €4.2bn in the country’s second-biggest public offering in almost two decades.
The VW unit struggled for years to generate economies of scale between Scania, MAN and a Brazil-based operation that makes VW-branded commercial vehicles.
Renschler has sought to address the problem by deepening internal co-operation and accelerating efforts to expand the unit’s global presence. The unit sold 205,000 commercial vehicles in 2017, up 11.6% on 2016, as revenue grew 12% to €23.9bn and operating profit excluding special items rose 27% to €1.7bn.
VW chairman Hans Dieter Poetsch told reporters on Friday the manufacturer would retain a controlling stake in the business and that a share sale might not happen until 2019, as it still required final approval.
VW’s second-largest shareholder, the German state of Lower Saxony, has voiced its support for a deal, with state economy minister Bernd Althusmann, who represents the state on VW’s supervisory board, saying he is "confident the stock listing will be successful".
VW signed a cooperation agreement with Toyota Motor’s Hino unit last week and in 2016 acquired a 17% stake in US peer Navistar. "We’re very satisfied with the development at Navistar," Renschler said.
He is now looking to expand the unit’s presence, since it still lacks the global reach of commercial-vehicle industry leaders Daimler and Volvo.
With rumours of an IPO also around Daimler, VW will need to address a pending legal dispute with minority shareholders at the MAN subsidiary to beat Renschler’s previous employer to a share sale.