Parting ways

Sources: VW preparing listing of truck subsidiary

LR2EB3C0OP7RU Reuters – MAN Scania trucks buses VW Volkswagen Group 2015
Too big to handle. Source: Reuters

Volkswagen will legally convert its truck division into an autonomous joint-stock company next month in preparation for a 2019 listing, Handelsblatt has learned from company sources. Wolfsburg-based VW is considering selling a minority stake in Volkswagen Truck & Bus to bring in billions for the parent as the global vehicle market is upended by electronic and autonomous vehicles. The Hanover-based unit could be valued in the double-digit billions of euros.

A final decision has not yet been taken and would partially undo the efforts of former CEO and Porsche family heir Ferdinand Piëch to create a global vehicle maker that produces everything from tiny city cars to hulking over-the-road trucks. Mr. Piëch ’s years-long efforts brought the iconic German carmaker well-known truck brands such as Munich’s MAN and Sweden’s Scania. An initial public offer would need the approval of powerful labor representatives concerned about workers’ interests. However, it could give divisions more autonomy and redirect the parent’s focus into a holding company.

VW executives have been focused on crisis-management since Matthias Müller took over as CEO in September 2015, when Dieselgate became public. The listing would be a welcome strategy leap for the team that has also put considerable effort into electromobility and connected vehicles. The overhaul would give VW a holding company strategy similar to that of rival carmaker Daimler or supplier Continental.

Senior management hopes the decision to demerge the truck unit will mark a decisive shift in that direction. If the legal redefinition of the division goes ahead, it will receive its own credit rating and will be able to raise its own capital. Investment banks to oversee an IPO would be selected later in the year.

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