BMW Will Get $1.2 Billion Boost From Milder Antitrust Fine

BMW AG will raise its earnings forecast for the year because it expects an antitrust fine from the European Union will be much smaller than anticipated two years ago.

The automaker said late Thursday it will get a roughly 1 billion-euro ($1.2 billion) boost to earnings this quarter from revaluing a provision for an EU fine over allegations that it colluded with its German peers to delay rolling out cleaner cars. BMW shares rose as much as 1.9% on Friday in Frankfurt.

BMW expects the EU “will significantly reduce its allegations” against the company, according to a statement. The lesser-than-anticipated penalty will allow the company to raise its margin projection for auto earnings before interest and taxes by about 1 percentage point.

At issue is the EU’s investigation of BMW, Volkswagen AG and Daimler AG over their alleged conspiring on emission-reduction systems for diesel cars between 2006 and 2014. The EU said in 2019 that the companies’ coordination made technology aimed at reducing nitrogen-oxide emissions less effective.

Daimler was first to inform the EU about the possible breach of cartel rules and therefore may avoid a fine. VW has also cooperated with authorities and is less exposed to legal risk than BMW.

The provision reduction adds to a run of positive momentum for BMW. The company said this month it expects returns for its main auto business to be at the upper end of the 6% to 8% range it was forecasting for the year. While the carmaker was recently forced to idle some production due to the global shortage of semiconductors, it hasn’t lost as much output as rivals.

BMW shares have risen about 19% this year, roughly in line with the Stoxx 600 Automobiles & Parts Index.

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