Volkswagen, the largest automaker in Europe and the second-biggest in the world , together with German bank Metzler, decided to sell financing company LeasePlan to a consortium of investors.
The financial company was sold, confirming recent reports, for a total of 3.7 billion euros, according to an announcement by VW made on Thursday. The German conglomerate already has its own in-house leasing business, VW Leasing GmbH, making rather useless the 50 percent stake it held in the third-party leasing business since 2004. The sale would also assist the company in achieving its latest cost cutting targets as well as serve in the bigger restructuring strategy of the group. Volkswagen AG has decided to achieve annual savings of five billion euros by 2017 at the namesake passenger car brand in a bid to close the profitability gap with leaner rivals, particularly larger competitor Toyota.
Established back in 1963 and today the world’s biggest lease fleet management company, LeasePlan does business in 32 countries, has 6,800 employees and manages 1.42 million vehicles, with a net profit of 372 million euros last year. The company was acquired by a a consortium comprising Dutch and Danish pension funds, the sovereign wealth funds of Singapore and Abu Dhabi, Goldman Sachs and private equity firm TDR Capital – with the acquisition pushed for completion by the end of the year, after passing through regulatory approval from the Dutch Central Bank and the European Central Bank. LeasePlan would remain an independent company, supported by the consortium to achieve its current expansion plans.