Volkswagen receives first-round bids for €6bn engine unit

Volkswagen AG has received first-round bids from buyout firms including Blackstone, EQT and CVC for its Everllence engine business, according to Reuters. The offers, submitted as part of a potential carve-out valued at roughly €6 billion, mark an important step in the German carmaker’s efforts to streamline operations and concentrate on its core automotive activities. The bidding process is taking place in Germany and involves both financial sponsors and industrial players as Volkswagen evaluates strategic options for the division.

First round bids submitted for Volkswagen AG carve-out

The initial bids were submitted in the first phase of the sale process, people familiar with the matter told Reuters. The asset under review is Everllence, the rebranded former MAN Energy Solutions business, which produces large engines for marine and energy applications.

Sources indicated that the valuation under consideration is in the region of €5 billion to €6 billion. While the exact structure of the bids has not been disclosed, interested parties are understood to be competing for a majority stake in the unit. Volkswagen has declined to comment on the specific bidders or the details of the offers.

The involvement of several global private equity firms highlights the continued appetite for European industrial carve-outs. Such transactions allow investors to acquire established businesses with steady revenue streams and opportunities for operational improvements. In recent years, buyout groups have targeted non-core divisions of major corporations, seeking to unlock value through focused management and restructuring.

Additional parties may also be evaluating the asset, though the first round was dominated by financial sponsors. The company is expected to review the proposals before determining which bidders will proceed to the next stage. The process remains at an early phase, and there is no guarantee that a transaction will be completed.

For Volkswagen, the potential sale is part of a broader strategic shift. Europe’s largest carmaker has been reassessing its portfolio amid intensifying competition in the global automotive market, particularly in electric vehicles. Divesting businesses outside its main car manufacturing operations would allow management to allocate capital more directly to vehicle development and technology investments.

Strategic context behind Volkswagen AG’s carve out plan

Everllence, formerly known as MAN Energy Solutions, manufactures engines used primarily in ships and power plants, as well as equipment for industrial energy systems. Although the unit has a long industrial history and operates in specialized markets, it is not directly aligned with Volkswagen’s core passenger car and commercial vehicle activities.

Reuters reported that Volkswagen has been exploring options for the business as part of a wider efficiency drive. The company has been under pressure to improve profitability and competitiveness while managing the high costs associated with the transition to electric mobility and digital technologies.

In previous public statements, Volkswagen has emphasized its commitment to focusing on its automotive brands and platforms. Selling a majority stake in the engine division would represent a significant step in narrowing that focus. The company may retain a minority shareholding, though no final decisions have been confirmed.

The European industrial sector has seen a number of similar divestments in recent years. Conglomerates have increasingly separated non-core assets to simplify corporate structures and respond more quickly to market changes. Private equity firms, in turn, have sought opportunities to invest in established engineering businesses with global customer bases.

The submission of first-round bids by Blackstone, EQT and CVC signals meaningful investor interest in Volkswagen’s Everllence unit. While discussions remain preliminary, the potential €6 billion carve-out reflects both the scale of the business and the strategic recalibration underway at Europe’s largest carmaker.

As Volkswagen reviews the offers and considers next steps, the outcome will shape the future ownership of a longstanding industrial division. More broadly, the process illustrates how traditional manufacturers are reshaping their portfolios to concentrate on core operations in a rapidly evolving automotive landscape.