Car sick

24 June 2020 By Christopher Thompson Follow @CGAThompson

The German carmaker is considering buying the $500 mln French car-rental firm, which it sold in 2006. Beleaguered boss Herbert Diess could use its airport and city locations to launch ride-sharing services. Plummeting rentals and high debt will make bumpy economic returns ahead.

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Volkswagen is in talks to acquire French car-rental firm Europcar Mobility, according to a Reuters report on 23 June citing people familiar with the matter.

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 Paris-listed investment firm Eurazeo in 2006.

Volkswagen has reached out to Europcar to express its interest in an acquisition and carry out due diligence, Reuters quoted its sources saying. The talks are preliminary, and a deal is far from certain given the financial toll of the coronavirus outbreak on Europcar, the sources added.

Shares in Europcar rose by 8% to 2.56 euros by 0820 GMT on June 24.

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