Volkswagen is reportedly in talks to purchase French car rental giant Europcar, in a deal that would allow the German automaker to better capitalize on its fleet, according to people familiar with the matter.
Europcar has been struggling financially during this period due to the COVID-19 pandemic, which has made travel around the world very difficult, while also sapping demand for rental cars. Hertz knows this all too well, as they already declared for bankruptcy.
It’s also worth noting that VW has owned Europcar before, but chose to sell it to investment firm Eurazeo back in 2006, as per Autonews Europe.
Read Also: Hertz Paid $16.2 Million In Bonuses Days Before Declaring Bankruptcy
According to one of the sources familiar with the matter, VW has already reached out to Europcar to express interest and carry out due diligence. The talks however are preliminary and we have no way of knowing if a deal will indeed take place.
Europcar has a market capitalization of 390 million euros ($441 million) and a net debt of more than 1 billion euros ($1.13 billion), as of the end of March. A new deal could allow VW to buy back Europcar at a significant discount, compared to the 3.32 billion euros ($3.75 billion) it sold it for roughly 14 years ago.
Last month, Europcar stated that it had secured a 307 million euro ($347 million) financing package, including a 220 million euro ($248 million) loan guaranteed at 90% by the French state – just to stay afloat during the coronavirus crisis.
If this deal does indeed go through, Europcar could avoid sharing the same fate as Hertz.
