FRANKFURT -- Volkswagen Group valued its heavy-trucks business at as much as $18.6 billion in what is set to be one of the year’s largest European public offerings.
VW intends to offer stock in Traton, which sells MAN and Scania vehicles, for 27 euros to 33 euros each, it said in a statement. The sale values the division at 13.5 billion euros to 16.5 billion euros ($18.6 billion).
The automaker aims to raise up to 1.9 billion euros ($2.1 billion) by floating a stake of at least 10 percent in its Traton trucks unit later this month, its second attempt to bring the business to market.
The sale will mark a litmus test not only for IPO demand in a European stock market that turned in its worst month in 3 1/2 years during May, but also for the ability of VW’s management to push through deeper structural change.
VW plans to invest proceeds in transforming its auto production as it readies the launch of dozens of electric vehicles over the coming years and deepens an alliance with Ford Motor.
It is also seeking to capitalize on the premium that truck stocks command over automakers to create an acquisition currency, having earlier shown interest in potentially boosting its 16.8 percent stake in U.S.-based truck maker Navistar. Management denies that a Navistar deal is in immediate prospect, but such a move would fit with a broader pivot by VW toward the United States to balance its reliance on China, where it sells half its cars.
Besides Swedish heavy-truck specialist Scania and Germany’s MAN, Traton includes a smaller operation in Brazil that sells VW-branded commercial vehicles for emerging markets.
"We will now meet investors across the globe to convey our Traton story and the future potential of the group," Traton CEO Andreas Renschler said on Friday after the publication of Traton's IPO prospectus. "We are confident that we will then be able to ring the Stock Exchange bell before the end of June if the market stays reasonable."
Traton said that Swedish pension fund AMF Pensionsfoersaekring had agreed to become a cornerstone investor in the listing and subscribe to 200 million euros worth of Traton stock.