VW’s IPO of Traton Truck-OEM Unit Sees Slow Start
The initial public offering of Traton SE, formerly known as Volkswagen Truck & Bus, did not go off with a bang. The Germany-based global truck builder slipped below its opening share price soon after being listed on the Frankfurt exchange.

A VW Constellation operating in Mexico.
Photo: Traton SE
The initial public offering of Traton SE, formerly known as Volkswagen Truck & Bus, did not go off with a bang. The Germany-based global truck builder slipped below its opening price of 27 euros ($30.47) a share soon after being listed on June 28 on the Frankfurt exchange.
Although Volkswagen AG had priced the IPO at the lower end of its previous range, according to a CNBC report, shares traded around 26.47 euros shortly afterwards. However, as of July 1, Traton SE was up, trading at 26.55 euros.
CNBC reportedthat VW had said earlier in June that it aimed to raise 1.55 to 1.9 billion euros($1.8 billion-$2.2 billion) from the IPO by selling between 10% and 11.5% of the wholly owned subsidiary, which was down from earlier indications that it might list as much as a 25% stake.
Back in March, VW delayed the IPO, due to what it termed at the time a “difficult market environment,” while stating it was still aiming for an IPO “once market conditions had improved.” Then, on May 13, the company announced that it is was resuming preparations for an IPO of Traton SE.
Commenting in a press release on the IPO, Hans Dieter Pötsch, chairman of the supervisory boards of Volkswagen and Traton, said: “The successful IPO demonstrates the investors’ trust in Traton’s future.
“It confirms that Traton and Volkswagen are on the right track and that they are pursuing the right strategies,” he continued. “The IPO will provide a basis for both companies to create additional value for all their stakeholders going forward.”
Volkswagen noted that it will remain “a committed majority shareholder” of Traton SE.
The CNBC news report on the IPO stated that VWplans to invest the proceeds of the Traton IPO in overhauling its automobile production, “as it prepares to launch a range of electric vehicles and strengthens an alliance with U.S. stalwart Ford Motor Co.”
However, a Bloomberg reportposited that VW could use the IPO proceeds to expand the truck subsidiary’s 16.8% stake in Navistar, which has been billed from day one as a “strategic alliance.”
“Analysts have speculated on a buyout of Navistar after Traton’s listing, with Bloomberg Intelligence analyst Christopher Ciolino calling a deal ‘a likely outcome,’” noted the Bloomberg report.
Indeed, the German car-and-truck behemoth has said repeatedly that having a robust, competitive Class 8 product in North America – which is still the largest heavy-duty commercial vehicle market in the world – is absolutely integral to that plan.
When asked by a CNBC reporter if the company had plans to buy Navistar, Traton CEO Andreas Renschler replied, “We are very happy with our partnership with Navistar, and we are now working on certain projects to realize them. In our field, it’s more components of the drivetrain that you are exchanging, and we are in a good kind of momentum with our partner Navistar. We are very proud of how they develop, and time will show what will come.”
Earlier this year, Traton reported solid growth in 2018, stating it had achieved a vehicle sales increase of 14% by delivering a record 233,000 commercial vehicles across its MAN, Scania, and Volkswagen Caminhões e Ônibus brands.
That sales level was the highest reached since Traton was established as a wholly owned subsidiary of VW in 2015.
Watch Traton CEO Andreas Renschler on CNBC:
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