VW plans to take their truck division public

By Colin Windell 

As part of the restructuring of VW AG it appears the company intends to list the truck division.

Volkswagen truck division to list as a new company called Trator

It appears Volkswagen AG will be creating a stock corporation called Trator from the heavy truck division and listing the new entity sometime next year.

VW is scheduled to host a capital markets day at the sidelines of the IAA Commercial Vehicle Show that opens in Hanover, Germany this week and company sources say the board of management will have finality on the move by that time.

These same sources say a primary driver is to generate sufficient capital to mount more of a challenge to both Daimler AG and Volvo AB – however, any listing would be entirely dependent on the market conditions next year.

While Volkswagen has not 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 the sources.

The trucks business has a value of about R499,5-billion, according to Bloomberg Intelligence and generated revenue of about R408-billion last year, with Europe accounting for 73% of sales.

The business 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. 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.