Volkswagen AG's board is working toward a decision to list its heavy-truck division, a move that would generate fresh funds for its bid to challenge global leaders Daimler AG and Volvo AB, according to people familiar with the matter.
VW's supervisory board plans to discuss the matter early this week, and the truck unit will host a capital markets day later in the week at the sidelines of the commercial-vehicle show in Hcanover, Germany, said the people, who asked not to be identified as the talks aren't public. VW intends to list the truck unit's shares next year, but the exact timing will depend on market conditions, they said.
While Volkswagen hasn't formally mandated banks yet, Goldman Sachs Group Inc. and Bank of America Corp. are in a good position to become global coordinators for Traton's listing, according to people familiar with the matter. Volkswagen may also hire a third lead bank on the transaction, another person said.
Representatives for VW and the banks declined to comment.
The trucks business has a value of about $33.3 billion, according to Bloomberg Intelligence analyst Michael Dean. It generated revenue of about 24 billion euros last year, with Europe accounting for 73 percent of sales.
The business has been turned into a stock corporation and was renamed Traton AG this year to clearly distinguish it from VW's larger passenger-car division. Key VW stakeholders -- including the German state of Lower Saxony, VW's second-largest shareholder with a 20 percent stake, and the company's powerful labor unions -- have backed the project. VW will retain a controlling stake in Traton.
The IPO of the unit -- which comprises the highly profitable Swedish Scania brand, Germany's MAN truck and bus marque as well as a business in Brazil -- marks the most significant structural shift for VW so far as it undergoes a major overhaul.
SundayMonday Business on 09/16/2018