BERLIN (Reuters) – Volkswagen said on Wednesday it would halt preparations for an initial public offering (IPO) of its trucks unit Traton until market conditions improve, stalling what was expected to be Germany’s biggest share offering this year.

FILE PHOTO: A combination of two file photographs shows the logos of German carmaker Volkswagen (L) in Carlsbad, California, April 29, 2013 and Swedish truck maker Scania in Ludwigsfelde, February 1, 2012. REUTERS/Staff/File Photo

The automaker had previously said it could list up to 25 percent of Traton in a deal that was expected to raise 5-6 billion euros (9.1 billion pounds).

Volkswagen said it would still aim for an IPO once market conditions improve.

Britain’s looming departure from the European Union and a trade dispute between the United States and China have caused uncertainty on stock markets, making investors hesitant.

Sharp fluctuations on the markets make it difficult to determine the price for an IPO.

In September Volvo Cars and its Chinese owner Geely also postponed plans to list the Swedish carmaker blaming trade tensions and a downturn in the automotive industry. Proceeds from European listings are down 97 percent so far this year, according to Refinitiv data.

Volkswagen had in recent days been considering modifying its plan, and mulled measures like reducing the stake of Traton that it planned to float to 15 percent from 25 percent, people close to the matter said.

On Tuesday, Volkswagen’s Chief Financial Officer Frank Witter said the board unanimously backed the idea of listing Traton but warned markets remained volatile. On Monday he had said an IPO of Traton would not come at any price.

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J.P Morgan, Goldman Sachs, Deutsche Bank and Citi had been hired as global coordinators for the listing.

One of the top bankers involved, who spoke under the condition of anonymity, had said it would be foolish not to do the IPO now because truck markets would be worse off next year.

Traton includes the MAN, Scania and Volkswagen trucks businesses. Volkswagen had aimed to list it as part of its drive to create a global trucks business.

“VW certainly takes its responsibility to maximise shareholder value seriously, which we think has been the rationale behind pulling the IPO on current valuations. Looks like we should respect this,” analysts at Evercore ISI wrote.

A company presentation published in late February showed Traton had 2.77 billion euros in bank liabilities and 3.22 billion euros in other loans and liabilities.

A flotation could have given the business the resources to deepen its relationship with Navistar, a U.S. truck maker in which it currently owns a 16.85 percent stake.

Reporting by Michelle Martin in Berlin, Arno Schuetze in London, Pamela Barbaglia in London and Alexander Huebner in Munich; Editing by Tassilo Hummel, Mark Potter and Alexandra Hudson



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