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 the week of Sept. 17, and the truck unit will host a capital markets day later in the week at the sidelines of the commercial vehicle show in Hanover, 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 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 also may hire a third lead bank on the transaction, another person said.
Representatives for VW and the banks declined to comment.
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% stake, and the company’s powerful labor unions — have backed the project.
The initial public offering of the unit — which is made up of 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. New CEO Herbert Diess is working to make the world’s largest automaker less centralized and more agile by 2025 to tackle a seismic industry shift toward electric vehicles and new digital services.
German rival Daimler AG is adopting a new corporate structure as well that will grant its truck business more independence, but executives have remained tight-lipped so far about a possible IPO.
VW trucks chief Andreas Renschler has been the key driver behind the manufacturer’s intensified effort to improve cooperation between Scania and MAN and expand his division’s footprint outside Europe. He joined Volkswagen in 2015 after almost a decade of running Daimler’s truck unit, the world’s biggest commercial-vehicle manufacturer by revenue.
A successful share sale would generate funds for Renschler’s push to catch up with rivals in terms of global reach. Earlier this year, the manufacturer signed a cooperation agreement with Toyota Motor Corp.’s Hino division, and the company also is looking to increase its presence in China. Compared with Daimler, which owns the Freightliner truck brand, or Volvo, which builds Mack models, the VW division only recently has gained a foothold in North America, with the purchase two years ago of a stake in U.S. peer Navistar International Corp.
The company said in April that lifting the stake in Navistar, including a possible acquisition, would be an option.