Volkswagen AG is to sell its wholly-owned subsidiary Europcar to the French investment group Eurazeo for a gross 3.32 billion euros. “The purchase price confirms the high capability of Europcar. It shows that the employees have produced a first-class performance over the last years and have thus generated a significant increase in the value of the company,” the Chairman of the Board of Management of Volkswagen AG, Dr. Bernd Pischetsrieder, said in Wolfsburg on Thursday. The sale still requires approval by the Supervisory Board of Volkswagen AG as well as clearance from the anti-trust authorities.

The Volkswagen Group remains firmly committed to its strategic goal of a mobility services provider. “An intensive review established that we can also achieve this goal without owning a short-term vehicle hire company such as Europcar. By selling the company, our capital tie up is significantly reduced. And we can continue to focus on our core business,” said Pischetsrieder.

Executive Vice-President of Marketing and Sales at Volkswagen AG, Stefan Jacoby, said there had been considerable interest in Europcar. “Once net debt has been deducted, the purchase price amounts to 1.26 billion euros. We reviewed three options under the process – strategic expansion, an IPO and a sale. From the viewpoint of Volkswagen AG, the sale is a good solution.” Strategic expansion would have required substantial investment on the part of the Volkswagen Group.

Jacoby added that a decisive factor was that Eurazeo will continue to run Europcar as a company and plans to grow the business. The sale is expected to become legally effective before the end of the first half of 2006.

 Volkswagen AG took over all the shares in Europcar International SA registered in Paris in 1999. Europcar currently operates over 2,900 vehicle hire offices in more than 145 countries and has a workforce of 5,200. Last year, Europcar increased the number of vehicle hire days by 11.7 percent to 36.3 million. Sales revenue by the Europcar business line rose by 9 percent in 2005 to 1.3 billion euros. Profit before tax amounted to 101 million euros, 20.5 percent higher than the previous year. Profit after tax ran at 66.9 million euros, 25.4 percent up on the figure for 2004.

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