German battery maker Varta faces breakup as lenders seek to spin off household battery unit

The Varta company premises in Ellwangen, Baden-Württemberg. Source: Jason Tschepljakow/dpa

In the struggle for the future of battery manufacturer Varta, a breakup of the company is moving closer. Key lenders want to spin off the battery business from the group, putting hundreds of jobs at risk.

Hardly any battery brand is as well-known as Varta. Whether in remote controls, flashlights, or toys – the blue-yellow batteries from Ellwangen in Swabia have been in millions of households worldwide for decades. Now, this traditional company could be broken up.

Key lenders intend to spin off the business with the well-known household batteries from the group, as they stated in a written announcement. The reason: the company's strained financial situation. The remaining two business divisions could consequently slide into insolvency.

Crash After Apple's Withdrawal?

According to its own information, Varta employs around 3,260 people, many of them in Ellwangen. The most recently published figures from 2024 show that the company made a loss of approximately €64.5 million on sales of more than €790 million. In addition to household batteries, Varta produces microbatteries (e.g., for hearing aids) and energy storage systems for private households and industry.

A plant with around 350 employees in Nördlingen, Bavaria, is scheduled to close this autumn. Apple, the most important customer for the site, pulled out, as announced in May. New major customers were lacking. Varta will continue to produce button cells there until November for the US group's wireless headphones – but these are likely to come from Asia in the future.

This is not the first crisis for the German battery manufacturer. As early as 2024, the company had to restructure under a procedure according to the Corporate Stabilization and Restructuring Act (StaRUG). Old shareholders lost their investment, and creditors waived part of their claims. The procedure was intended to prevent insolvency. Varta declared it completed in April of last year.

Future Technology – But No Money

According to industry experts, Varta still has potential. The company is working on, among other things, sodium-ion batteries, which are considered a future technology. Large and more sustainable energy storage systems could be developed from this in Europe.

But precisely this future costs money. According to the creditors, Varta needs short-term financing in the mid-double-digit million range to maintain ongoing operations. In addition, high investments are required for the coming years.

The most important lenders – including Deutsche Bank and the financial investors RBC BlueBay, Blantyre, and Whitebox – no longer see a viable overall solution. Instead, they want to spin off the household battery business and create a new ownership structure for it.

"Despite intensive discussions with all stakeholders, no commitment has been received from any side to provide the necessary additional financial resources," a spokesperson for the group explained.

According to media reports, the Swiss investor Allswiss submitted an offer. The financing creditors, however, describe it only as an expression of interest. According to their account, essential information is still lacking to evaluate the proposal.

"Anyone who would welcome full repayment by their own account and at the same time rejects every discussion about it does not want to sell, but to liquidate – at the expense of the company, its employees, and its location."