Volkswagen has introduced unusual safeguards in its sale of its Everllence engine division, asking PE bidders EQT AB, CVC Capital Partners, and Bain Capital to make sealed bids as it seeks to manage potential conflicts of interest in the $10bn auction process, according to a report by the Financial Times.
The report cites unnamed people familiar with the matter as revealing that the German automaker has asked three buyer groups led by the PE firms to submit final offers next week. The move is designed to reduce the risk of perceived bias after concerns emerged that one bidder group could have an informational advantage.
All three consortia combine private equity firms with sovereign wealth funds, pension capital, and industrial backers.
The process has been complicated by EQT’s partnership with key Volkswagen shareholders, including Porsche Automobil Holding and the Qatar Investment Authority, raising concerns among rival bidders about potential conflicts of interest. In response, several supervisory board members linked to those shareholders, including chair Hans Dieter Pötsch, have stepped aside from the decision-making process.
The governance adjustments will leave Volkswagen’s 20-member supervisory board—split evenly between shareholder and employee representatives—with a majority of labour-side votes when it ultimately selects a preferred bidder based on management’s recommendation.
Volkswagen had initially aimed to conclude the process ahead of its annual shareholder meeting but has extended the timeline to allow additional review of final proposals.
The asset being sold, formerly known as MAN Energy Solutions, has seen valuation expectations rise significantly during the process, with bids increasing from around €5bn in early rounds to approximately €8.5bn more recently. The business manufactures large-scale industrial engines and turbines used in marine propulsion and power generation.
Demand for its products has been supported by growing energy needs linked to data centres and industrial infrastructure, contributing to renewed investor interest in the sector. Private equity firms have increasingly targeted industrial assets seen as relatively insulated from rapid technological disruption, including artificial intelligence-related volatility.
Volkswagen plans to retain a 49% stake in Everllence following the transaction and has expressed a preference for a future public listing, a structure that has received broad acceptance among the bidding consortia, according to people familiar with the discussions.