For some people, Volkswagen (DE: VOWG_p) is like a super tanker: huge, slow and bulky, but very difficult to stop when he has the wind in its sails. Sometimes, this momentum may even surprise.
The largest automotive group in Europe has confirmed its intention to register its unit trucks Traton here in the month of August, after having decided a few months ago that the timing was bad.
Market conditions are much degraded since then, while the us president, Donald Trump has stepped up its trade war with China and has announced its intention to establish a new one with Mexico (he still decides to tackle head-on Europe).
The market has chosen to interpret the news as a sign of confidence rather than despair, pushing the group’s shares up 2% in early trading on Tuesday in Frankfurt, while the German Dax has bounced back 0.9% on Monday. The benchmark Euro Stoxx 600 was up 0.3% at 13: 30, while the index british FTSE 100 was up 0.2%.
If and when it would come, Traton could be the largest ipo in Europe this year. Analysts estimate the value of the unit to about 16 billion euros ($18 billion), which means that a sale of 25% would bring 4 billion euros.
To the extent that it seeks a dual listing in Frankfurt and in Stockholm (the seat of the Scania brand of Traton), liquidity will suffer if it tries to sell a lot less than that.
It turns out that the imperative to list Traton is more powerful than the loss of a billion here or there on valuation. This imperative is born out of the disaster diesel VW, which cost him $ 30 billion in fines and other costs to date (it is likely that others will take the form of a fine antitrust imposed by the EU for conspiring with BMW (MI: BMW) and Daimler (DE: DAIGn) in order to preserve the cleaner technologies of the market).
The response from VW has been planning a considerable expansion in electric vehicles, with the aim of producing a quarter of its global production in electric by 2025. It is a challenge, as evidenced by the information according to which it must revise its plan to purchase batteries of 56 billion dollars, because even the mighty Samsung (KS: 005930) may not be safe to meet its commitments in terms of delivery.
It is not clear if the change of heart in Traton is bound, but the risks of execution of the transitional power require a strong balance sheet. They also require that the management of the group to be well targeted. Let the area of the trucks to follow his own path is a step towards both of these objectives at the same time.
