Volkswagen Sets IPO Price Range for Its Big-Truck Unit
June 13 2019 - 8:36PM
Dow Jones News
By William Boston
BERLIN -- Volkswagen AG said on Thursday that it would offer up
to 15% of its truck unit Traton AG in a range of EUR27 ($30.5) to
EUR33 a share, making the initial public offering worth up to
EUR1.9 billion.
The share offering, which values all of Traton at about EUR16.5
billion, marks a long-awaited step by Volkswagen to begin chipping
off some of the company's divisions no longer deemed necessary for
maintaining the core business of building cars and offering new
mobility services.
"We are well equipped for the decisive phase," Volkswagen Chief
Financial Officer Frank Witter said. "The clear goal of the listing
is to create additional value for our stakeholders."
Traton, one of the largest truck manufacturers in the world,
earned EUR1.7 billion in pretax profit last year and generated
EUR25.9 billion in sales revenue. Its business includes the brands
MAN and Scania and it also has a 17% stake in Navistar
International Corp., the U.S. truck maker, and a 25% stake in
Sinotruk Ltd, the Chinese truck manufacturer.
Volkswagen has long struggled to achieve consensus among its
core shareholders and labor leaders, who hold half the seats on the
company's nonexecutive board, over the question of divesting itself
of a unit that is no longer considered core business.
In a 2017 interview with The Wall Street Journal, former
Volkswagen Chief Executive Matthias Müller said the company had
compiled a list of such noncore businesses that together
represented about 20% of the auto giant's total revenue.
The Traton offering is potentially the first of a number of
divestitures that could be in Volkswagen's pipeline.
Volkswagen said that investors will have the opportunity to
subscribe to Traton shares starting from June 17-27 and that shares
would begin trading on June 28 on exchanges in Frankfurt and
Stockholm. The final pricing of the offer will be determined on or
around June 27 through book building.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
June 13, 2019 20:21 ET (00:21 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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