Blackstone, EQT and CVC have submitted first-round offers for Volkswagen’s Everllence division in a €5bn to €6bn carve-out, according to the Financial Times.

The deadline for initial bids for the business, formerly known as MAN Energy Solutions, reportedly expired last week. The unit manufactures shipping engines and heat pumps and is being positioned for a majority sale, with Volkswagen expected to retain a significant minority stake.

The auction has also attracted interest from CD&R and industrial carve-out specialist KPS, while certain corporate buyers have explored bids. Representatives for Volkswagen and the private equity firms declined to comment.

The proposed transaction comes as Volkswagen accelerates efforts to reshape its portfolio amid weaker automotive demand and rising competitive pressure from Chinese manufacturers. The carmaker reported €6bn in net cash flow from its automotive division in 2025, materially ahead of expectations as cost reduction measures begin to take effect.

The Everllence sale is unfolding alongside Continental’s auction of its ContiTech division, creating a rare situation in which two sizeable German industrial carve-outs are running in parallel.

Continental has maintained its intention to divest ContiTech this year despite the overlap and a recent profit warning at the unit. ContiTech reported an operating profit margin of 4.9% in 2025, below its target range after a weak fourth quarter.

The dual processes reflect broader structural pressure across Europe’s industrial sector. Groups are streamlining portfolios to manage volatile energy costs, environmental regulation and Chinese imports, while private equity firms see opportunity to enhance performance through operational restructuring and fresh capital deployment.

Data from PitchBook show that almost €60bn of European private equity carve-outs were completed up to early November last year, representing 13.5% of total private equity deal value. The Everllence auction now stands as one of the most closely watched industrial transactions in the region.

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