One of the biggest stock market debuts of the year is expected after Volkswagen announced late Sunday that it intends to sell shares in Porsche, the luxury sports car brand it owns, for a valuation of up to $75 billion.
Porsche, the manufacturer of the Taycan electric sedan and the 911 sports car, would be valued greater than its German rivals BMW and Mercedes-Benz at that point.
Months in the works, Porsche’s IPO on the Frankfurt Stock Exchange now takes place as initial public offerings have seen a drop in interest due to choppy stock markets. Porsche’s initial public offering, if it goes through, will rank among the biggest ever in Europe, according to Refinitiv.
It would bring Porsche back to the public markets for the first time in ten years after Volkswagen acquired the sports car manufacturer as a result of Porsche’s unsuccessful attempt to acquire the much larger Volkswagen. Since that time, Porsche has grown to be one of Volkswagen’s most coveted brands, generating an operating profit of $3.6 billion in the first half of the year.
The businesses will continue to have close relations even after the stock offering because of their tightly entwined decades-long histories. Porsche will continue to be majority owned by Volkswagen, while Oliver Blume will serve as both companies’ CEO.
In a statement, Volkswagen stated that it planned to sell around 25% of Porsche’s preferred shares at a price between EUR76.50 and EUR82.50, with the potential to generate up to EUR9.4 billion in revenue. The sovereign wealth funds of Qatar, Norway, and Abu Dhabi, as well as the money-management company T. Rowe Price, have already committed to investing in Volkswagen’s offering.
The Porsche and Piech families have also decided to purchase a 12.5 percent stake in Porsche at a price that is 7.5 percent more than the price of the offering. These families, whose ancestry can be traced back to the establishment of Porsche, are also Volkswagen’s largest shareholders as a group.
This might result in Volkswagen earning an additional EUR 10.1 billion. The voting stock the families would acquire would give them a considerable influence in how Porsche is run, unlike the preferred shares being sold in the public offering.
Approximately half of the total revenues from the IPO would be distributed to Volkswagen shareholders in the form of a special dividend. Executives have stated that the remaining funds would be used to support Volkswagen’s transition to electric vehicles, including the development of new vehicle batteries.
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Porsche
This page is about Porsche AG, a brand and producer of automobiles. See Porsche SE to learn more about the holding company that owns the bulk of the Volkswagen Group. See Porsche for further usage information (disambiguation).
Group
The Group consists of ten brands from five different European nations: Audi, Lamborghini, Bentley, Porsche, and Ducati. Volkswagen, Volkswagen Commercial Vehicles, A KODA, SEAT, and CUPRA are also included. The Volkswagen Group also has a large number of additional brands and business divisions, including financial services. Volkswagen Financial Services includes leasing, leasing for customers and dealers, banking, insurance, and fleet management services.
The Volkswagen Group is laying the groundwork for the biggest reform process in its history with its aNEW AUTO – Mobility for Generations to Comea Group strategy and future program: the realignment of one of the best automakers to become a leading provider of sustainable mobility on a global scale. To do so, the Group will change its core automotive business, which will include, among other things, the introduction of another 30 or more fully electric vehicles by 2025 and the expansion of battery technology and autonomous driving as new key businesses.
An iffy connection will conclude with a flotation.
A LONG WAIT IS OFTEN INVOLVED IN BUYING A NEW Porsche. Some purchasers now face additional delays as a result of a fire that broke out last week mid-Atlantic on a ship carrying 4,000 automobiles, including Porsches, from the stable of brands controlled by Volkswagen, as if limited production and distant dealers weren’t enough of a bottleneck (VW).
Porsche the firm is similar to Porsche automobiles. After Porsche’s bold bid to acquire the much larger German firm in 2008, VW joined with the legendary sports car manufacturer, and talk of allowing investors to purchase a portion of the latter has been circulating nearly continuously ever since. Due to a VW rescue, Porsche’s near-bankruptcy was averted as a result of the mishap. As a result of the incident, Porsche became a fully owned subsidiary of VW in 2012. Another was that the holding company run by the aristocratic Piech and Porsche families, who are decedents of the founders of the sports car manufacturer, became VW’s largest shareholder.
Now more than ever, a parting of the ways appears imminent. Volkswagen and the holding company for the families claimed to be in “advanced discussions” regarding a Porsche initial public offering (IPO) on February 22nd.
Herbert Diess, the CEO of VW, could hardly wait for the spin-off to occur. He has been working to organize VW’s cumbersome lineup of ten different brands. He could do without the trouble of dealing with flashy Porsche, which has always thought of itself as superior than the competition. For instance, Porsche insisted on creating its own platform to support electric cars rather than sharing one with the other brands in the group to save money.
Ferrari is not Porsche. Its operating margin of over 15% is far lower than the 25% or so of the Italian company. But it performs far better than the rest of VW. Even though the group produced only 277,000 of the 11 million vehicles it produced in 2019 (before the pandemic and the accompanying chip bottleneck), it contributed 10% of group revenues and 25% of group operating profit. The Taycan, a battery-powered vehicle, demonstrates that it has an effective electrification plan that most other sports-car manufacturers do not. Porsche, according to banker Philippe Houchois of Jefferies, is worth between 60 and 90 billion euros. That amounts to more than EUR 109 billion, or half of VW’s current market capitalization.
The Piech and Porsche families, too? According to some estimations, if they hadn’t attempted the failed coup in 2008, their members would today be twice as wealthy. Additionally, in order to purchase Porsche stock, their holding company will need to obtain cash, maybe by selling some of their VW stock. However, as Mr. Houchois notes, they would at least reclaim a more direct share in the company that carries the family name. They may have been waiting for it, after all.
The headline for this piece was “Reverse gear” and it was located in the Business section of the print edition.
Porsche: Does it resemble VW?
In 2011, Volkswagen acquired Porsche. Porsche was once considered a division of Volkswagen AG (interestingly, besides being the Porsche parent company, VW also owns Audi, Bugatti, and Lamborghini). In light of this, Volkswagen AG is the entity that owns Porsche.
Are VW engines used in Porsches?
Among these synergies is the provision of Porsche components to sibling companies. Other brands may use the Panamera platform for conceptual or under development vehicles, according to Macht.
Macht responded that the 911 platform “might be made available to other VW brands” when asked if it was also on the table. But Porsche won’t employ any other VW Group engines save the V6 in the Cayenne. Macht stated that “engine development is a basic value for Porsche.”
Porsche is now focusing on weathering the global recession after its failed effort to acquire VW. The company aimed for annual sales of 150,000 cars prior to the credit crunch. However, sales this year are down 24% to little over 75,000. With its three core model families—the Cayenne, Panamera, and 911/Boxster—Porsche will make an effort to achieve its initial aim, but it is also considering additional range expansions.
“Any brand-new model would need to be upscale, athletic, and have a strong financial case. Porsche must be the most expensive, top-quality, and capable of providing the best driving experience in any segment “explained Macht.
The Panamera’s 1800kg kerb weight is low for its market segment, making it an ideal candidate for efficiency improvements. There will be a six-cylinder Panamera available next year, and eventually there will be a hybrid and a diesel Panamera as well.
Porsche has also considered building an electric vehicle. According to Macht, “it would have to have the same maneuverability, performance, acceleration, and range as a conventional Porsche.”
“The current state of technology is incompatible with Porsche’s needs. At least two years will pass before the technology is up to par.”
Who came first, VW or Porsche?
In 1931, Ferdinand Porsche established the Porsche automobile company. He oversaw the creation of the Mercedes compressor car in the early 1920s and later collaborated with his son to create the original concepts for the Volkswagen automobile.
Porsche almost purchased VW when?
Once the agreement is made, one of the most dramatic takeovers in the auto industry will come to a close.
Its 2009 attempt was unsuccessful because it was unable to secure the necessary 75% shareholding.
The carmaker found it challenging to collect sufficient funds to purchase the necessary stake due to the global financial crisis and the downturn in the global automobile industry.
Nevertheless, Porsche racked up a lot of debt in the process and faced lawsuits from investors who claimed the company misled them.
In an unexpected turn of events, the companies reached an agreement in 2009 in which Volkswagen agreed to acquire Porsche.
Why did Volkswagen decide to buy Porsche?
Another justification for Porsche’s purchase of Volkswagen stock was now clear: Porsche believed it was getting a good bargain and that the company was inexpensive.
Is a Porsche a Beetle from Volkswagen?
Although it was based on the Volkswagen Beetle, Porsche’s first manufacturing vehicle had a different objective. Look at this more closely.
Porsches are among the market’s most ruthless sports vehicles, and owning one has long been the ultimate goal. Anything that contains the number 911 is immediately identified with Porsche because the number is so closely associated with the company.
The 911 was never the brand’s first product, though. Instead, the innovative idea to create a compact but agile sports automobile was what gave rise to the Porsche name. The 356, as it was known, served as the prototype for a high-performance machine that would go on to become a legend.
The 356 got its start in obscurity. Ferry Porsche, the son of Ferdinand Porsche, sought to create a fun-to-drive automobile in 1948 and established a business to start producing them. The licensing royalties from the sales of the Volkswagen Type 60, also known as the Beetle and created by Porsche Sr., provided the majority of the revenue.
The VW Beetle and the Porsche 356 shared many parts during the Porsche 356’s first few years of manufacturing. However, as Porsche began designing their own components, the exchange of parts decreased over time.
Although it had a different purpose, Porsche’s first manufacturing vehicle was fundamentally based on the Volkswagen Beetle. Look at this more closely.
Does the Porsche Macan’s engine come from a Volkswagen?
My Porsche has a Volkswagen engine—who installed it? It shouldn’t surprise anyone that Porsche provides its base Macan crossover with a turbocharged 2.0-liter inline-four from VW/Audi since the question is as old as the company itself.
Is there a VW engine in the Porsche Cayenne?
Although the Porsche Cayenne received a mixed response when it first hit the market, it quickly established itself as having excellent performance for an SUV, comparable decent handling, and powerful engines. The Cayenne S and Cayenne Turbo, both powered by a V8, were the first models in the series. Versions with VR6 and diesel engines were added later in the model cycle.
The base model is propelled by a 250 PS VW 3.2-L VR6 engine (184 kW; 247 hp). Porsche has its own intake manifold, but other than that, the VW engine and Porsche’s engine are very similar. The manual transmission accelerates from 0-100 km/h (0-62 mph) in 9.1 seconds, while the Tiptronic S does it in 9.7 seconds.