Volkswagen to sell 51% stake in Everllence to Bain Capital

(Sharecast News) - Volkswagen has entered into an exclusive arrangement with investment firm Bain Capital for the sale of its 51% stake in Everllence, its diesel engine manufacturing business. Bain had been competing against CVC and ⁠EQT in a private equity auction.

The German car maker said the envisaged transaction in the form of a leveraged buy-out generates proceeds of around €7.4bn and a decision on how to use the proceeds will be taken at a later date.

In the medium term, Volkswagen intends to remain a major shareholder in Everllence with a 49% stake, it said.

Chief executive Oliver Blume said: "Over the past few years, Everllence has developed into a success story that we can be proud of. We realigned and strengthened the company following the acquisition in 2018. Today, Everllence is one of the world's leading manufacturers of large engines, turbomachinery and decarbonization solutions.

"Now is the right time to take the next step - to transfer the majority stake to a new, strong partner. We want to create added value for everyone with this step: leaner structures and processes will give Everllence the opportunity to achieve further growth in attractive markets such as data centres, the energy sector and shipping. At the same time, it will allow us to focus even more strongly on our core business."