Varta insolvency and manufacturing decline

German battery manufacturer Varta has entered insolvency proceedings following severe financial difficulties. The company, which has operated for 139 years, saw its stability undermined by the loss of a major contract with Apple, which reportedly transitioned the production of lithium batteries for headphones to cheaper Chinese suppliers.

On October 1, the Stuttgart court officially opened insolvency for four group companies: VARTA AG, VARTA Microbattery GmbH, VARTA Storage GmbH, and VARTA Micro Production GmbH. This development affects approximately 2,300 employees, with the closure of the Nördlingen plant expected to result in the loss of roughly 350 jobs.

In a significant restructuring move, the profitable household battery division is being spun off as an independent company, Varta Consumer Batteries GmbH & Co. KGaA. This separation has been approved by the German Federal Ministry for Economic Affairs and is supported by main creditors, including Deutsche Bank, as well as investors such as RBC BlueBay, Blantyre, and Whitebox.

The spin-off aims to preserve approximately 990 jobs with no planned staff reductions. Operations at the central production site in Dischingen, Baden-Württemberg, will continue in three shifts. Managing Director Mark Munz stated that the business unit is “stable and well-positioned with customers and partners.” The new entity anticipates average annual revenue growth of three to four percent through 2029, targeting European, Asian, South American, and Canadian markets.

Insolvency administrator Tobias Wahl has indicated that there is interest from potential investors regarding the group’s technological capabilities, but the company’s survival remains dependent on judicial oversight and successful acquisition offers.