Date Published: 2020-04-08 06:51:03+00:00
Date Published: 2020-07-01 05:44:51+00:00
UBER Clone Europcar has a market capitalization of 390 million euros and net debt as of the end of March of more than 1 billion euros.
Volkswagen AG is in talks to acquire car French rental firm Europcar Mobility Group SA, in a deal that would allow the German carmaker to better capitalize on its fleet, people familiar with the matter said on Tuesday.
The acquisition would come as Europcar struggles to cope with the economic fallout of the COVID-19 pandemic, which has weighed on travel around the world and sapped demand for car rentals. It would represent a reversal for Volkswagen, which sold Europcar to investment firm Eurazeo SE in 2006.
Volkswagen has reached out to Europcar to express its interest in acquisition and carry out due diligence, one of the sources said. The talks are preliminary and a deal is far from certain given the financial toll of the coronavirus outbreak on Europcar, the sources added.
Such services, similar to ZipCar in the U.S., have surged in popularity over the past decade, particularly in Japan’s densely-packed cities where housing often comes without parking spots. The expense of ownership, from tax and parking spots to a mandatory vehicle inspection every two years, as well Japan’s famous public transportation network, has led many younger people to shun car ownership for years.
In that environment, short-term rental, which lets people reserve vehicles online and pick them up at a nearby location without involving an office or staff, was a hit. Times Car Share lets members to book a vehicle via their smartphones from just 220 yen ($2) for 15 minutes. Membership has surged to 1.3 million users, more than 2.5 times that of 5 years ago.
Europcar, which has market capitalization of 390 million euros ($441 million) and net debt as of the end of March of more than 1 billion euros, has also attracted interest from private equity firms, including Apollo Global Management Inc, the sources added.
“With limits on people’s movements, we’re facing a very tough situation,” Park24 Chief Executive Officer Koichi Nishikawa said at the company’s most recent earnings press conference. Its mobility segment, which includes car rentals, saw revenue plunge 45% in May, he said. The company posted a 6.3 billion yen ($59 million) operating loss for the quarter. Shares are down more than 30% this year, compared to the 8% decline in the Topix index.
According to Bloomberg Volkswagen, Apollo and Eurazeo, which currently owns close to 30% of Europcar, declined to comment.
When Volkswagen divested Europcar in 2006, it said it could be a mobility services provider without owning a short-term vehicle hire company. A new deal for Europcar would allow Volkswagen to buy it back at a significant discount to the 3.32 billion euros it sold it for 14 years ago.
Europcar is hoping to avoid the fate of U.S. peer Hertz Global Holdings Inc, which filed for bankruptcy protection in May.
Last month, Europcar said it secured a 307 million euro financing package to manage through the coronavirus crisis, which included a 220 million euro loan guaranteed at 90% by the French state.
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