Volkswagen Group in talks to buy Europcar – report
The Volkswagen Group is in talks with Europcar Mobility Group for an acquisition deal that will enable the German automaker to better capitalise on its fleet, Automotive News Europe reported. This would appear to be a reversal of the transaction which saw Volkswagen sell Europcar to investment firm Eurazeo in 2006, according to the report. Eurazeo currently owns close to 30% of Europcar.
The German automaker group expressed its interest in an acquisition to the French car rental firm and to carry out due dilligence, sources told Automotive News Europe earlier this week. These discussions are in their early stages and far from certain, given the economic toll inflicted upon Europcar by the coronavirus outbreak, the sources said.
Europcar has market capitalisation of 390 million euros (RM1.88 billion) while net debt as of the end of March is more than 1 billion euros (RM4.81 billion). The French rental firm has also attracted interest from private equity firms such as Apollo Global Management, and will be hoping to avoid the fate that has befallen American rental car firm Hertz, which has filed for bankruptcy protection in May.
Automotive News Europe also reported Europcar as saying last month that it secured a 307 million euro (RM1.48 billion) financing package, which included a 220 million euro (RM1.06 billion) loan that was guaranteed at 90% by the French government.
At its seperation from the Volkswagen Group, Europcar said in 2006 that it could be a mobility services provider without owning a short-term vehicle hire company, the report said. At present, a new deal for Europcar would allow the German manufacturer to buy back the rental firm at a significant discount to the 3.32 billion euros (RM15.97 billion) it was sold for 14 years ago, it added.