Swedish private equity firm EQT AB has lined up financing from the Qatar Investment Authority as it prepares to lodge a binding proposal for Volkswagen AG’s sizeable marine engine arm, Everllence, people familiar with the matter said.
The sources, who spoke on condition of anonymity because the deliberations remain private, said EQT is forming a consortium with the Qatar Investment Authority and Porsche Automobil Holding SE - both of which are material shareholders in Volkswagen. The grouping is targeting a formal bid for Everllence ahead of an early June deadline set by Volkswagen for the next round of offers.
Private equity firms Bain Capital and CVC Capital Partners Plc are also reported to be pursuing Everllence, creating a competitive auction for the asset. Earlier reporting indicated the marine engine unit could attract a valuation of around €8 billion or higher.
People familiar with the process said the involvement of major Volkswagen shareholders within EQT’s consortium strengthens its financial footing and brings investors with intimate knowledge of Volkswagen’s operations to the table. That familiarity with the underlying business was cited as a factor that could be advantageous in the bidding process.
The timeline and the presence of several well-capitalized bidders mean the next phase of the sale will be closely watched by investors and industry participants. Volkswagen’s requested timetable points to an accelerated window for prospective buyers to firm up proposals.
Summary
EQT AB, together with the Qatar Investment Authority and Porsche Automobil Holding SE, is preparing a binding offer for Volkswagen’s Everllence marine engine unit ahead of an early-June deadline, facing competition from Bain Capital and CVC Capital Partners. The unit may be valued at roughly €8 billion or more.
- Key points
- Consortium composition includes EQT AB, Qatar Investment Authority and Porsche Automobil Holding SE - all parties with financial capacity and operational familiarity.
- Competition from private equity firms Bain Capital and CVC Capital Partners creates an active bidding environment.
- Everllence could fetch a valuation at or above €8 billion, reflecting the size of the asset on offer.
- Risks and uncertainties
- Outcome depends on the bids submitted by all parties by Volkswagen’s early-June deadline - timing risk for potential buyers.
- Competitive pressure from other bidders, notably Bain Capital and CVC Capital Partners, could affect pricing and deal structure.
- Valuation uncertainty - while €8 billion or higher has been cited as a benchmark, final pricing will be determined through the auction process.