German automotive giant Volkswagen is moving forward with one of Europe’s largest corporate sell-offs this year after receiving initial offers worth roughly $9.4 billion for its diesel engine subsidiary Everllence, according to three individuals with knowledge of the negotiations.
The proposed sale price of approximately 8 billion euros, including debt obligations, has exceeded some industry analysts’ projections for the division that manufactures marine engines and heating pump systems.
Several major private equity companies, including Brookfield, CVC, and Blackstone, have entered the bidding competition for the industrial unit, sources revealed. These investment firms are particularly interested in acquiring businesses that appear insulated from potential artificial intelligence disruption. Additionally, Japanese diesel engine producer Yanmar has also submitted an offer, according to a fourth insider.
The Financial Times previously reported that Porsche SE, which holds the largest stake in Volkswagen, is exploring a potential investment in Everllence. All sources requested anonymity due to the confidential nature of the discussions.
According to one source, final binding proposals are anticipated within the coming six weeks. Volkswagen requested initial bids in mid-February and recently informed select participants that they had advanced to the next phase of the process, two sources confirmed.
This divestiture represents part of a broader trend among major European corporations working to simplify their business operations and shed non-essential divisions. The movement is generating numerous high-quality acquisition opportunities for private equity funds seeking to invest capital as merger and acquisition activity rebounds.
When contacted for comment, Volkswagen representatives declined to provide details but reiterated the company’s previous statement about evaluating strategic alternatives for the business unit. Porsche SE, Yanmar, Blackstone, CVC, and Brookfield all declined to comment on the matter.
