Volkswagen sounds out customers for MAN Energy Solutions

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Volkswagen has approached several companies to measure their appetite for purchasing MAN Energy Solutions, that makes large diesel engines for ships and power generators, people close to the issue said.

The informal sales pitch is part of Volkswagen Chief Executive Herbert Diess’s attempts to slim down and simplify the group that has 12 brands, trucks, buses, motorbikes, cars and electric bicycles belonging to its business.

Volkswagen has not yet started an official sales process or appointed an adviser for the sale of the company but has contacted competitors in the engine manufacturing business such as Cummins, Wartsila and private-equity owned Jenbacher, these sources stated.

Volkswagen refused to comment.

“Volkswagen wants to see what would be possible,” one of the people said, adding that depending on the feedback it gets the automaker could start a formal sales process later this year.

People familiar with the issue stated that they expected MAN Energy Solutions to gain a valuation of about 3 billion euros ($3.36 billion) in a potential sale.

The business, formerly referred as MAN Diesel & Turbo, also makes turbochargers used in the oil & gas industry and in last year reported operating earnings of 133 million euros on sales of 3.1 billion euros.

The sources stated it could also attract interest from Mitsubishi Heavy, Alfa Laval and from private equity groups including EQT, Bain and Cinven if it is formerly put up for sale, the sources stated.

The potential sales process follows Volkswagen’s decision previously this year to scrap strategies for an initial public offering of its Traton trucks unit, that features the MAN, Scania and Volkswagen Caminhoes e Onibus brands.

Volkswagen has had a hard time to slim down in the past after the company’s works council, which has veto power over major restructuring moves, blocked attempts to sell motorbike brand Ducati and transmissions maker Renk.

MAN Energy Solutions was originally a part of VW’s trucks brand MAN, however some of MAN’s assets were moved to Volkswagen last year as part of efforts to streamline Traton prior to the planned listing.

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