MAN portfolio shake-up as Navistar talk persists


VW Group restructure to strengthen Traton for IPO; Navistar buyout on cards

MAN portfolio shake-up as Navistar talk persists
Andreas Renschler

 

An intercompany sale within the Volkswagen Group (VW) to streamline its portfolios is said to strengthen VW’s truck unit, Traton, ahead of a future initial public offering (IPO), while reports speculate it could be part of a wider strategy to buy out Navistar and challenge global trucking rivals Daimler and Volvo.

VW and MAN SE agreed to transfer 76 per cent of transmission manufacturer Renk and 100 per cent of engine maker MAN Energy Solutions from the latter for the former.

VW says the slimming of MAN’s ‘Power Engineering’ portfolio is to allow Traton to be the head company of a "pure truck and bus group", which, along with MAN, also comprises Scania and Volkswagen Caminhões e Ônibus brands, and consolidates its financial position ahead of a possible 2019 IPO.

The value of the transfer is estimated between 1.85 billion and 2.05 billion euro (A$2.97 and $3.29 billion) and is expected to be finalised by the end of the calendar year. 

"In the light of our decision to prepare Traton for a possible initial public offering (IPO), separating the Power Engineering business is a consistent step," VW board member for finance and IT Frank Witter says.

Navistar rumours

In VW’s statement, Traton CEO Andreas Renschler adds: "With the planned sale of the business, we can focus on our core business in the future. Thereby, we are refining our portfolio and taking another step towards capital market readiness."

Reuters reports that part of that process recently involved a meeting between VW and Traton representatives with bankers and lawyers regarding strategies around the flotation, which could be worth up to €6 billion (A$9.64 billion).


VW hails strategy as attention turns to Navistar. Read more, here


The restructure of the brands’ portfolios and the flotation could allow VW to "build a war chest" to completely buy out US brand Navistar (International), of which it already owns almost 17 per cent.

Such an acquisition would bolster VW's empire to further challenge rivals Daimler (Mercedes-Benz, Freightliner, Fuso, Western Star) and Volvo Group (Volvo, Mack, UD, Renault) in the global trucking business.

 

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