Volkswagen has received preliminary bids for its diesel engine division, Everllence (formerly MAN Energy Solutions), valuing the unit at approximately 8 billion euros ($9.4 billion) including debt. This valuation is higher than some analysts predicted, with Deutsche Bank previously estimating it between 5 billion and 7 billion euros.
Several private equity firms, including Brookfield, CVC, Blackstone, Bain Capital, EQT, and Advent International, have submitted bids for Everllence, which produces shipping engines and heat pumps. Japanese diesel engine manufacturer Yanmar has also submitted an offer. Porsche SE, Volkswagen's biggest shareholder, is reportedly considering investing in Everllence.
Volkswagen had asked parties to submit bids in mid-February and has recently notified some of them that they are moving to the second round. Final bids for a majority stake are expected soon, with Volkswagen planning to pick a buyer within weeks. The company aims to retain a stake of between 30% and 40% in the business.
This potential disposal is part of Volkswagen's broader effort to streamline its portfolio and focus on its core automotive operations, especially amid the costly transition to electric vehicles, tariffs, and competition from Chinese manufacturers. The sale would be among the largest carve-outs by a European company this year, providing high-quality assets for buyout funds looking to deploy capital.
In the latest developments, CVC, Bain Capital, and an EQT consortium (including Porsche SE and Qatar) are the final contenders for the majority stake. Employee representatives on the supervisory board will have a decisive voice, and representatives from Porsche SE and Qatar on the VW Supervisory Board are expected to abstain from the final vote. Everllence is also identifying generators for AI data centers as a growth segment.
