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Volkswagen courting Swedish investors to anchor Traton truck IPO


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Reuters  /  February 5, 2019

Volkswagen is in talks with Swedish institutional investors AMF, AP Fund 1 and 4, Investor AB and Folksam about being cornerstone shareholders in the dual listing of its trucks unit Traton in Stockholm and Frankfurt.

The discussions could result in more than one cornerstone investor being brought on board and are for each investor to take a 150 million to 300 million euro ($171.21-$342.42 million) stake.

Cornerstone investors are institutions that are invited to subscribe to shares ahead of an IPO to boost its popularity and often serve as a seal of approval for other investors. Securing such investors is popular among Nordic companies.

Första AP-fonden (AP1) had been asked about being anchor investors, its head of equities Olof Jonasson said. He declined to comment on stake size and price.

“We have been approached but I couldn’t really tell you anything about the details... Our interest... would be about business potential and valuation and all those things put together,” said Jonasson, whose fund is also a large owner of Swedish rival AB Volvo.

VW expects to sell shares worth 5 billion-6 billion euros ($5.7-$6.9 billion) in an April listing that could value Traton about 20 billion-25 billion euros.

At this size and value, the IPO could potentially become Germany’s and Sweden’s biggest new share offering in 2019, but the sources said its size had not yet been finalised and would depend on market conditions.

AP4 head of equities Per Colleen said he could not confirm any of the details but added: “Anything of that size, we will have a serious look at”.

AMF, Investor AB, Folksam, Volkswagen and Traton did not immediately respond to requests for comment.

Traton is the umbrella name for MAN, Scania and VW brands, but Swedish company Scania is by far its most valuable part, with superior profitability and stability.

Scania was listed in Stockholm until 2014, when its then largest investor VW took it private in a deal that valued it at about 17.9 billion euros, but many Swedish investors that were squeezed out said then that the offer undervalued the group.

Swedish funds were keen for a substantial stake in the Traton IPO as they expected it to have a large influence on the automotive and engineering-heavy Stockholm blue-chip index that they try to outperform.


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Volkswagen pauses plans of taking truck unit public

Jason Cannon, Commercial Carrier Journal (CCJ)  /  March 13, 2019

Just shy of one year ago, then-Volkswagen Truck & Bus announced a name change to Traton Group – a move that was largely seen as a precursor for the company becoming a publicly traded entity independent of its Volkswagen parent.

Citing economic conditions, Volkswagen says it will now put such a move on the back burner.

“In the current market environment, Volkswagen Aktiengesellschaft [Wednesday] decided not to continue with the preparation of an IPO of TRATON SE for the time being,” the company said via release. “The Board of Management is still aiming for an IPO of the TRATON SE once market conditions improve.”

Traton is the umbrella company for MAN, Scania, Volkswagen Caminhões e Ônibus and RIO and owns a nearly 17 percent stake in Navistar, parent company of International Trucks.

While the global automotive market is off to a slow start, the U.S. truck market is fresh off a record 2018. Many OEM build slots are booked solid for 2019 with limited sales slots open for the remainder of the year. That has suppressed order intake this year, a trend that is likely to slog along until boards start opening up again in 2020.

Class 8 orders for the past 12 months have totaled 429,000 units.

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Volkswagen Pulls Truck Unit IPO in Setback to CEO's Revamp

Bloomberg  /  March 13, 2019

After a poor start to 2019, the European IPO market doesn’t look that bad. It’s more likely that the German giant couldn’t get the value it wanted. 

Volkswagen AG canceled plans to sell a share of its Traton SE division due to weak market conditions, dealing a setback to the automaker’s plan to generate fresh funds for the heavy-truck unit’s expansion outside Europe.

“We regret that we have to refrain from a stock listing of Traton SE,” Chief Financial Officer Frank Witter said Wednesday. “The management board continues to aim for a stock listing in a better market environment.”

VW decided to delay after a difficult start to the new year for the global automotive industry. In Europe, Traton’s biggest market, the economy is forecast to grow this year at the slowest rate since 2013. Activity has declined in part due to uncertainty surrounding the U.K.’s departure from the European Union and U.S. President Donald Trump’s threats to increase tariffs on European-made cars.

Carmakers including VW are also suffering in China, the world’s biggest auto market and the top region for the company’s sales. A slowdown there has worsened in the first two months of the year, and VW this week said that its growth forecast for the year would depend on improvements in the second half.

The truck unit decision was disappointing, said Arndt Ellinghorst, an Evercore analyst. The announcement came a day after the VW Chief Executive Officer Herbert Diess and Witter, the CFO, updated investors on the company’s strategy.

“VW certainly takes it responsibility to maximize shareholder value seriously, which we think has been the rationale behind pulling the IPO on current valuations,” Ellinghorst said.

VW on Monday said a listing, valued at as much as 30 billion euros ($34 billion), would be “highly desirable,” while warning of volatile markets and economic uncertainty. The planned minority share sale would have been the biggest in Europe this year.

The IPO, which has been in the works for more than two years, is VW’s most tangible effort thus far to become less centralized and boost efficiency as part of a strategy overhaul through 2025. Gaining fresh funds would help Traton challenge global leaders Daimler AG and Volvo AB in markets outside Europe.

The decision is a setback for Diess, who’s under pressure to keep up the pace on a revamp to ready the world’s biggest carmaker for the industry’s transformation to electric cars. VW seeks to gain speed and lower costs to deliver on a plan for 70 electric models by 2028 and keep up profitability.

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11 minutes ago, Red Horse said:

Hmnn.  I wonder if the discussions with Ford have anything to do with this?  Probably not but just how many dance partners can you have?

Kevin, what do you think?

Good point Bob.

As said, the European IPO market is decent right now, so their excuse is a smoke screen for another reason.

It is said the Chrysler- Daimler merger failed because the company cultures were so far apart. I wouldn’t disagree. I don’t see a Ford - Volkswagen cooperation being any different.

They’ll never admit it, but both parties have reason to be a bit desperate. And desperation breeds friends of convenience.

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In a way Ford and VW Group's difficulty getting hitched may be the similarity of the two companies, both controlled by powerful extended families. Old time capitalists used to do these touchy mergers via arranged marriages. Those are kind of unfashionable now, but perhaps the Fords and Porsches could have some social events for the singles in the family and hopefully some romance happens...

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