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600335 - Sinomach Automobile Co News Story

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UPDATE 1-Peers circle Volkswagen's large engines unit -sources

Tue 9th February, 2016 4:30pm
(Adds industry background, Chinese suitor) 
    By Arno Schuetze and Georgina Prodhan 
    FRANKFURT, Feb 9 (Reuters) - Volkswagen  VOWG_p.DE  has 
received expressions of interest for a unit making engines used 
in ships or small power stations, as rivals sense an opportunity 
to get their hands on the asset as a result of the car maker's 
emissions scandal, several sources familiar with the matter 
    Peers from China, Europe and the United States have recently 
told Volkswagen they would like to buy the operations of MAN 
 MANG.DE  that are not central to its trucks business, they 
said, adding that the unit may be valued at up to 4-5 billion 
euros ($4.51-$5.6 billion). 
    Volkswagen has so far stuck to its line that the business, 
which made an operating profit of 206 million euros on sales of 
3.3 billion euros in 2014, is not for sale.  
    Volkswagen was not immediately available for comment on 
    But Europe's biggest carmaker is struggling to cope with the 
fallout from the scandal, and last week postponed the 
publication of its 2015 results, saying it was unable to 
calculate the cost for fines, lawsuits and vehicle refits after 
cheating emissions tests.*:nL8N15K2W5 
    Separately, the trucks unit said earlier this week that it 
was keeping all options open with regard to expanding overseas, 
including a stock market listing.*:nL8N15N1E7     
    Volkswagen secured a 20 billion-euro bridging loan in 
January to keep above water until it can refinance itself in the 
bond market as it used to before the scandal broke.*:nL8N13S4CS 
    It has stressed that no fire sales are necessary and that no 
specific assets have been discussed with respect to a potential 
    But two people familiar with the matter said it was clear 
that if Volkswagen did have to sell something to meet the costs 
of the scandal, MAN non-truck diesel would be the first thing it 
would look at. 
    Another person said that Volkswagen continued to get 
expressions of interest for the unit and was expected to engage 
soon in a round of exploratory talks with a potential Chinese 
    "There has been a formal exchange. Talks are in preparation. 
But it's all very early stage," the person said, adding that 
Volkswagen has not allowed any peer to do a due diligence 
assessment of the asset.  
    Large Chinese peers include Yuchai  CYD.N , Weichai 
 000880.SZ  and Sinomach  600335.SS .  
    Chinese companies have been on a acquisition spree in 
Germany recently, buying up industrials groups in recent weeks 
as they try to broaden their international 
    General Electric  GE.N , Siemens  SIEGn.DE  and Sulzer 
 SUN.S  are also being named by investment bankers as potential 
suitors. However, they would likely only show interest in parts 
of the business, one of the sources said.  
    "Everyone is expecting it to come out - the question is 
when," another banker familiar with the car industry said. 
($1 = 0.8876 euros) 
 (Additional reporting by Freya Berry, Pamela Barbaglia and 
Andreas Cremer; Editing by Ludwig Burger and Adrian Croft) 
 ((; +49.69.7565.1197; Reuters 
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