BERLIN, June 25 - Volkswagen shares climbed 2.4% on Thursday after the carmaker announced it had selected Bain Capital to acquire a majority stake in its engine arm Everllence. The transaction is set to deliver roughly €7.4 billion ($8.41 billion) to Volkswagen as part of the company's broader restructuring efforts.
According to the terms disclosed by Volkswagen, Bain will acquire 51% of Everllence, a business noted for producing marine engines and pursuing expansion opportunities tied to increased generator demand for data centres amid the AI boom. The sale follows a multi-week bidding contest in which private equity firms CVC and EQT were also active bidders.
Using Everllence's book value of €3.4 billion reported in late May and the proceeds expected from the transaction, Reuters calculations place the enterprise's valuation at in excess of €9 billion. Volkswagen has indicated the buy-out proceeds will comprise the undisclosed sale price for the stake, a revaluation of the company and debt carried forward at completion. The company said it will determine how to deploy the funds at a later date. Completion is expected by the end of the year.
"With this envisaged transaction, Volkswagen would significantly strengthen its own financial position as its transformation moves forward," a JP Morgan analyst said.
Volkswagen chief executive Oliver Blume has committed to slimming the company's extensive portfolio to sharpen focus on its core automotive operations. Management has cited mounting pressures on earnings from tariffs, competition from Chinese automakers and the expensive transition to electric vehicles as drivers of that strategic refocusing.
The sales process included a consortium bid by EQT that incorporated Volkswagen's largest shareholder, Porsche SE. That development prompted Volkswagen's management to handle final offers through a sealed-envelope mechanism. Multiple supervisory board members abstained from the decision to avoid conflicts of interest linked to the shareholder consortium.
A Porsche SE spokesperson described the tender as having been carried out "in a transparent and professional manner."
Bain Capital emerged as the winning bidder and is expected to close the leveraged buy-out by year-end, subject to final documentation and customary closing conditions. Volkswagen has not disclosed the exact headline price for the 51% stake.
The deal presents Volkswagen with a substantial liquidity injection while management proceeds with restructuring plans intended to concentrate resources on the auto group's main business lines. How the company ultimately allocates the cash - whether to debt reduction, reinvestment in core operations, shareholder returns or other uses - will be decided after the transaction is completed.