VW supervisory board blocks Ducati sale

According to media reports, VW Group's 20-member supervisory board comprising of the company's labour leaders has overruled the management board's decision to sell the Ducati brand.

VW Group's operating profit rose by 19 percent in the last six months to 8.9 billion euros. This could be one of the reasons why the supervisory board felt the financial reasons stated by the management weren't compelling enough for the sale of Ducati and Renk - VW's transmission division. That said, the rise in profits is seen as a consequence of cost cutting measures and improvements in R&D at Volkswagen in the wake of Dieselgate scandal.

It has also been reported that there has been a strong opposition to the sale from various quarters inside VW Group. A spokesman for the VW Group's works council said that the half-year results show that the company doesn't need money and hence the question of selling subsidiaries doesn't arise. Further, Porsche and Piech families which control 52 percent of voting shares and have four seats in the supervisory board were not in favour of the management's decision either. Hence, due to opposition from influential shareholders and the union, the VW Group has decided to reconsider their decision.

Earlier, the VW Group had received bids amounting to 1.3 - 1.5 billion euros from investment companies and auto makers. On July 29, 2017, VW Group announced shortlisted bidders - Polaris Industries, Bain Capital, PAI and Investindustrial, while India's Eicher Motors and Bajaj Auto Ltd. were left out.

Source: Reuters