Yahoo Finance VW Closes In On £1.3bn LeasePlan Sale Boost
An international investment consortium is closing on a deal to buy the leasing arm of Volkswagen (Other OTC: VLKAF - news) in a deal that will raise well over £1bn for the embattled German carmaker.
Sky News has learnt that the investor group is hopeful of securing crucial approval from the European Central Bank (ECB) for the acquisition of LeasePlan, which manages 1.4 million commercial vehicles and company cars, in the next few weeks.
The deal will see the consortium, which includes state-backed wealth funds, pension funds and private equity groups acquiring both VW's stake and the equivalent shareholding of Friedrich Von Metzler, a German bank.
Talks about the deal have been taking place since early last year, well before the world's second-biggest car manufacturer was engulfed by a crisis triggered by its use of so-called defeat devices to obscure emissions readings.
The sale of LeasePlan is far from transformational for VW's balance sheet but will nevertheless come as a welcome development after months of scandal .
The consortium is being led by PGGM, a Dutch public sector pension fund, and includes the Abu Dhabi Investment Authority (ADIA), the Government Investment Corporation of Singapore (GIC), and TDR Capital, a London-based buyout firm whose investments include the fitness clubs chain David Lloyd Leisure.
Sources said the investor group had sought assurances about the exposure of the vehicles owned by LeasePlan to emissions-related issues.
One insider said that only 15% of the LeasePlan fleet consisted of cars made by VW.
The group said last year that because LeasePlan is a financial institution with a Dutch banking licence "any transaction and any change of ownership... will be subject to regulatory and competition authorities' approval".
This week, it emerged that VW was resisting calls from Brussels to provide compensation for European customers hit by the emissions scandal, with the German carmaker arguing that it is not required to give drivers in its home market the same treatment as American motorists.
VW, which invested in LeasePlan in 2004 at a €2bn (£1.4bn) valuation, acquired the company from ABN Amro, the Dutch bank which was later partially swallowed by Royal Bank of Scotland (LSE: RBS.L - news) in a deal that heralded the near-collapse of the UK lender.
As part of that deal, half of LeasePlan's shares were bought by Olayan Group in Saudi Arabia and Mubadala Development Company, another entity held by the state of Abu Dhabi.
Those investors subsequently sold out to Friedrich von Metzler.
LeasePlan describes itself as a Dutch financial services company which has become "the world-leading provider of fleet management services".
Operating in 32 countries, including the UK, it manages more than 1.4 million vehicles under a variety of brands, and employs 6,800 people.
The parties in the consortium either declined to comment or could not be reached.
