Not Just Any Merger: The Strategic Acquisition of Europcar by Volkswagen

VolksWagen (VW) have made a move into the mobility business, and they’ve made a big one. For over a year, rumours have been swirling that VW were looking to buy Europcar, and last week they closed the deal. This acquisition allows VW to cater to their customers’ mobility needs, specifically to those that aren’t simply buying a car. The emergence of mobility startups, ranging from Lime to Zipcar, have shown there’s a consumer need, and business model to be made out of people taking short range trips.

When buying a car Volkswagen can provide whatever you desire. From the latest and greatest car, decked out with all the bells and whistles, to a reliable second hand model. However, innovations in the auto industry are changing how people view their own mobility problems and solutions.

However, not everyone wants to buy a car outright. This is where the easy car rental companies, or companies with flexible lease agreements come in. Volkswagen anticipated this shift in consumer behaviour. That’s why their acquisition of Europcar isn’t shocking to anyone who knows the company.

Founded in 1949 in Paris, Europcar is one of the oldest and most-recognized car rental brands throughout Europe. Partnerships with global suppliers and carriers allow Europcar to have ties to nearly every country Worldwide, diversifying operations and boosting revenue.

Volkswagen doesn’t turn a blind eye to this, which is why they’ve agreed to pay $3.4 billion to acquire Europcar. Meeting a shift in consumer demand isn’t the only resource Volkswagen is gaining from this acquisition. In fact, the value the current employees provide is what will give Volkswagen the competitive edge in the future.

So how was it that Volkswagen came to this conclusion?

Osterus, the state-of-the-art software that sorts through thousands of data points to create insightful employment statistics. This article will focus on the different ways the talent at Europcar compliments Volkswagen, giving us more insight into why Volkswagen was eager to purchase Europcar.

Europcar is a large company with over 6,000 employees. Although this number doesn’t compare to the roughly seven hundred thousand employees Volkswagen has , these employees are strategically located, giving Volkswagen access to additional resources in Europe and other countries.

The work experience of employees at Europcar is astounding. Most employees have more than 6 years experience. General management has on average over 10 years of experience in their roles.operations and C suite employees are hovering around the 10 year mark.

There is no job title category with less than 3 years of experience. This is extremely rare to find, as the market is becoming competitive and there is an abundance of new entrants in the workforce. By gaining experienced professionals through this acquisition, Volkswagen has the manpower and expertise to grow their segment in the rental car industry under Europcar.

The work experience distribution further supports that employees at Europcar will be a strong asset toVolkswagen. The highest category of experience at Europcar is the 15+ year category which hosts 36.6% of employees. The 10–15 year category has18%, the 5–10 year category holds 21%, the 3–5 6.5% and the 1–3 category has 17%. There are only 0.9% of employees with less than a year of experience.

If you’ve read any of our other articles, you’d know most companies don’t have anywhere near as much talent in the 15+ year category. The high level of experience held by the employees of Europcar most likely contributed to the large purchase price. We can only hope that Volkswagen understands the talent they are acquiring and makes strides to integrate them, while keeping their high retention numbers.

Speaking of keeping employees in the company, let’s look at the historical employee retention rates at Europcar. Most employees work at Europcar for between 1 and 3 years, 35.5% of employees. The 3–5 year bracket has 21.3%, the 5–10 has 19.4%, and 16.5% of employees stay with the company for less than a year.

Due to the high level of employees in the 1–3 year category, Volkswagen will have to approach the merger carefully, to ensure that most employees stick with the company through the transition phase. The last thing they would want to do is disrupt the astounding loyalty of Europcar’s workforce. After all, the people Volkswagen is acquiring as part of this deal are one of the main reasons for it.

The current employment duration compared to retention in previous employment is also very telling. The majority of employees are in general management. This is great for Volkswagen as they already have leaders in the company that can help through the transition phase, assuming they stick around.

The sales department is also another top category where Europcar’s employees are found. This is ideal for Volkswagen. They’ll inherit personnel that can continue to develop sales and lead Europcar into new markets. There aren’t many other large clusters, which isn’t a bad thing. This means the company has diversified its job titles to cover all its bases, showing minimal talent is needed from Volkswagen to fill positions.

Looking at the gender distribution may highlight a potential area of improvement that Volkswagen could work on. We see that Europcar is male dominant, with an average of 61% of men to 37% women. The general management category has 60.49% males compared to 38.07% females. The sales and finance departments report similar results.

The only female dominant category is business administration which is 38.95% male to 60% female. Ideally, we would like to see these numbers equal; however, keep in mind that the representation of females in the workplace depends on the labor pool.

Volkswagen may decide to shift female employees over to Europcar to even out the workforce, depending on the company culture and business needs.

Smart M&A and bottlenecks to look out for

The acquisition of Europcar was a strategic business move on Volkswagen’s part. Not only does Volkswagen now have access to a new revenue stream with growing consumer demand, but they also enjoy added expertise throughout business operations. Some employees at Europcar may make the switch into positions at Volkswagen, while employees at Volkswagen might transition into Europcar.

Access to new talent brings creative solutions, added diversity, and more manpower to the team. We can only hope that Volkswagen effectively utilises this new talent pool and implements retention measures to safeguard their newfound resources.

We also took a closer look to see how well the people of Europcar can integrate into Volkswagen. There are a lot of differences in skill sets, education background and ways of working. However, if executed well the integration of Europcar employees will have far more benefits than drawbacks.

It’s clear when looking at the data that Europcar employees like working at the company and stay once they’re hired. The average previous employment retention at Europcar was roughly 4 years and 4 months, the current employment duration is double that. That might just seem like a nice metric, but when considering acquisition it becomes incredibly important. A multinational company like VW will want to acquire a company that has a great culture, so that it can integrate that culture with its own. A company where the employees will want to stay and work with the organisation to help it merge, rather than just leave. That’s why retention is incredibly important for such a process.

Here we compared both companies next to each other, on the left we see VW and a closer look into their General Management, on the right in green, we are seeing statistics on Europcar. Most of our data significantly highlights white collar employees.

The insight we were able to generate didn’t take days of careful research and due diligence, thanks to Osterus. This powerful software has the capabilities to start a new wave of thinking when it comes to employment standards. In no time we will be able to utilize these statistics, and more, to develop added insight into what taking a job with a company truly means.

For more information on Osterus, you can reach out directly, through LinkedIn, or schedule a demo today at osterus.com