Volkswagen Raises $393M in Sale of Traton Truck Unit Stake

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Volkswagen AG raised about 360 million euros ($393 million) through the sale of a 2.2% stake in Traton SE.

The German carmaker offered around 11 million shares in its truck unit through an overnight placement, in a bid to enhance liquidity in the stock, Volkswagen said in a statement March 18. The transaction priced at 32.75 euros per share, an 8% discount to Traton’s closing price in Frankfurt, according to terms seen by Bloomberg on March 19.

Traton’s shares fell as much as 7.6% on March 19, paring gains for the year to about 20%.

Europe’s largest carmaker is cutting costs and head count across its VW, Porsche AG and Audi brands as it confronts rising costs and geopolitical and economic uncertainties across its key markets. The Traton stake sale came after German lawmakers passed a landmark spending package that will unlock hundreds of billions of euros in debt financing for defense and infrastructure.

Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. led the stock sale.

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Volkswagen has been considering selling down its 90% stake in Traton, which comprises the brands Scania AB, MAN Truck & Bus, International Motors and Volkswagen Truck & Bus, for some time. The company was exploring the possibility of selling as much as 1 billion euros ($1.1 billion) in stock with bankers last spring after a surge in the unit’s share price, Bloomberg reported in May. CEO Oliver Blume said last year Volkswagen intends to maintain a stake of 75% plus one share in the unit.

The stock sale comes as other corporations are offloading stakes in previously spun-off units,