GIC, EQT weigh joint bid for Volkswagen’s 6-billion euro Everllence unit: sources

[FRANKFURT] A majority stake in Volkswagen’s heavy diesel engine unit Everllence is attracting interest from a number of private equity firms, according to people familiar with the matter, as the German automaker proceeds with its asset disposal programme.

EQT AB has been considering making a bid together with Singapore sovereign wealth fund GIC, according to the people. CVC Capital Partners, Advent, Bain Capital, KPS Capital Partners and Clayton Dubilier & Rice are also among potential bidders for the asset, the people said. Japanese trading firm Mitsui could be interested as well, they added.

Everllence could be valued at 5 billion euros (S$7.5 billion) to 6 billion euros in a deal, the people said, asking not to be identified as the information is private. Suitors are expected to submit their first-round bids by Feb 12, the people said.

Deliberations are ongoing and Volkswagen and the firms could decide against a deal, the people said. Representatives for the private equity firms and GIC declined to comment.

A representative for Volkswagen confirmed it is reviewing strategic options for Everllence but declined to comment further. Mitsui does not disclose whether it’s considering specific transactions, a representative for the company said in response to Bloomberg News queries.

A potential sale of Everllence, which makes ship engines and power-plant turbines, is taking place as Volkswagen faces pressure to boost profitability and streamline the sprawling portfolio of operations. The automaker has been beset by technological upheaval, flagging demand in major markets and new rivals like Tesla and BYD.

In December, VW’s Audi unit agreed to sell its majority stake in its Italdesign Giugiaro subsidiary to California-based technology company UST. Audi’s performance-car brand Lamborghini will retain a significant stake in the Italian design business.

Volkswagen has been working with Goldman Sachs Group and JPMorgan Chase on the potential sale of Everllence, Bloomberg News reported in September.

Formerly known as MAN Energy Solutions, Everllence recorded 337 million euros in earnings before interest and taxes on revenues of 4.3 billion euros in 2024, according to VW’s annual report. BLOOMBERG