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Volkswagen to Sell 51% of Everllence in EUR7.4 Billion Deal with Bain Capital

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Volkswagen to Sell 51% of Everllence in EUR7.4 Billion Deal with Bain Capital

Volkswagen (VOW.F) is selling a 51% stake in its large engine unit Everllence through a 7.4 billion-euro leveraged buyout transaction with private investment firm Bain Capital.

The German carmaker said Thursday it is letting go of its majority ownership in Everllence to fortify its financial position and streamline its investment portfolio. It said the deal will also secure the next phase of growth for the business, which it purchased in 2018.

"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 centers, the energy sector and shipping. At the same time, it will allow us to focus even more strongly on our core business," commented Volkswagen Group Chief Executive Officer Oliver Blume.

The group will retain a 49% stake in the business after the sale. Completion is targeted for the end of 2026, subject to consultations with employees and the approval of relevant regulators.

Everllence supplies propulsion, decarbonization and efficiency solutions to the maritime, energy and industrial sectors. Earlier reports suggested the business also piqued the interest of private equity group CVC Capital Partners (CVC.AS) and a consortium comprising Swedish private equity group EQT (EQT.ST), Porsche (P911.F) and Qatar.

Volkswagen said the deal included safeguard clauses for sites in Germany to secure jobs at Everllence. As part of the protection, sites in Augsburg, Oberhausen, Berlin, Hamburg and Ravensburg will be placed under a new ownership structure until at least the end of 2030.

Volkswagen shares rose marginally in early trading.

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