Possible takeover of Europcar by Volkswagen

  •   24/06/2020 - 12h08
  •   HARMANT Adeline

Finally, good news for the European automotive sector and proof that some manufacturers still have solutions to offer to the current crisis. The German Volkswagen group has just announced its intention to acquire the Europcar Mobility group, which specialises in car rental. We propose you to learn a little more about this news which will undoubtedly benefit this share on the stock exchange.

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Possible takeover of Europcar by Volkswagen
Image copyright: Keita Kuroki - Flickr

A new start for the Volkswagen group :

The Reuters agency transmitted this information this morning. According to the press release published, Volkswagen AG is currently in discussions with the Europcar Mobility Group with a view to acquiring the French company specialising in car rental. Sources close to the case are said to have passed on this information.

However, this announcement is of paramount importance and is intended to be very interesting for stock market investors. Indeed, it should be remembered that the Europcar group has recently experienced major difficulties and has been significantly impacted by the coronavirus pandemic, which has greatly reduced travel and affected the entire automobile sector, including rental companies. At the beginning of May, and in accordance with the possibilities offered by the French State, this company also obtained a loan guaranteed at 90% by the State and amounting to 220 million euros.

For Volkswagen, this project is of course also very important strategically and would mark a 180° turn in its activities. Indeed, it should be remembered that the German group sold Europcar in 2006 to Eurazeo for $3.3 billion. This is therefore a real turnaround in the situation.

 

What is currently known about this operation :

According to sources close to the case and the Reuters press agency, the car manufacturer Volkswagen has contacted Europcar to express its interest.

However, the discussions between these two companies seem to be only at a preliminary stage and there is still no question of an assured agreement, particularly in view of the very significant financial impact of the health crisis on Europcar.

The French group thus had a market capitalisation of €390 million with a net debt of over €1 billion at the end of March. Because of its extremely weak position, the company has also attracted the attention of other potential buyers, including investment funds such as Apollo Global Management, as sources indicate.

When asked about this news and this possible buyout, Volkswagen, Apollo Global Management and Eurazeo (which currently still holds nearly 30% of Europcar's capital), did not wish to comment at this time. It will therefore be interesting to scrutinize the news of this market in order to detect any rumour or new information about this dossier that could have an impact on the stock market.