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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2009
January – Porsche SE announces that it has increased its voting stake in VW to 50.8% and reiterates its plan to increase the stake to 75% later, if circumstances permit.
May – Porsche SE announces that it will pursue a merger with Europe’s largest automaker rather than continuing with its intention to acquire Volkswagen. Porsche’s 9 billion euro debt must be under control, according to Volkswagen Chairman Piech, before a deal can be reached.
July – Piech’s cousin and Porsche SE Chairman Wolfgang Porsche schedules a special supervisory board meeting for July 23 to consider the prospect of Qatar purchasing a stake in Porsche SE for more than 5 billion euros. The supervisory board accepts a request from Porsche’s board to get ready for a capital increase of at least 5 billion euros ($5 billion) in cash and/or a contribution in kind, which opens the door for a merger with Volkswagen. Wendelin Wiedeking, SE at Porsche, resigns.
In December, Volkswagen announced that it had paid 3.9 billion euros to acquire 49.9% of Porsche SE’s sports car division, Porsche AG.
Volkswagen boards will talk about listing Porsche on Monday.
Volkswagen’s approval of the sale of 25% plus one share of ordinary shares in Porsche AG to Porsche SE, as outlined in the two parties’ framework agreement from February, will also be decided.
That would give the Piech and Porsche families, who control Porsche SE, a minority voting position, which would support their efforts to gain more influence over the automaker that their ancestor Ferdinand Porsche started in 1931. View More
The meeting was confirmed on Monday in a separate statement by Porsche SE, which owns 31.4% of Volkswagen and controls 53.3% of the voting rights. The statement also stated that further board discussions and market developments still needed to take place before the listing could go live.
According to the general agreement agreed in February, only 12.5% of Porsche’s total capital, or 25% of preference shares, will be offered on the open market.
According to Refinitiv data, this would make the listing one of the biggest in German history and the biggest in Europe since Enel SpA in 1999.
Ordinary shares, which under the plans would entirely belong to Volkswagen and Porsche SE, would not be listed on a public exchange.
A stock market debut that would test the popularity of Europe’s largest automaker at a time when the valuations of top firms have fallen due to the unpredictability of war and record energy prices has raised some eyebrows among investors. View More
Henrik Schmidt, a governance specialist at Volkswagen investor DWS, stated that it is “getting more and more obvious that the shareholder families are putting their interests first.”
Volkswagen activates historic Porsche IPO plan, dispelling market skepticism
- The automaker announced its purported plan to list for an IPO in late September or early October that would be finished by the end of the year.
- According to Refinitiv data, the IPO may be the biggest in Europe since 1999 and the largest in German history.
On the outside of the Leipzig Porsche factory, a Porsche 911 Carrera 4S stands in the twilight of a drive-in theater.
Even as record inflation and a Russia-Europe energy confrontation have sent European equities falling, Volkswagen on Monday revealed its ambition to float sports car brand Porsche, setting off what could become one of the world’s largest listings.
The automaker declared its “intention to float” for an IPO in late September or early October, with a goal of finishing by the end of the year, but warned that the timing and listing were “subject to future capital market developments.”
Earlier on Monday, sources with direct knowledge of the negotiations told Reuters that Volkswagen may prolong the four-week window for purchasers to express interest or abandon its plans entirely if investors do not show sufficient excitement to make the move profitable.
Before the decision, one of the insiders claimed, “It would be the technical go-ahead, nothing more.” The stock market bell won’t necessarily ring in the end, but it is paving the way.
An estimated valuation of between $60 billion and $85 billion is anticipated by investors. Despite the success of the Porsche brand, other high-end automakers like Aston Martin and Ferrari have seen their stock prices decline.
According to the highest estimations, the IPO may rank among the biggest in European history since 1999 and the largest in German history, according to data from Refinitiv.
Qatar will be a cornerstone investor who plans to give the newly listed company a 4.99% ownership.
In an effort to reach Porsche’s devoted following, preferred shares will also be made available to ordinary investors in nations around Europe, including France, Spain, and Italy.
In addition, Volkswagen approved the sale of 25% plus one share of Porsche AG’s ordinary shares to Porsche SE, giving the automaker’s dominant Porsche and Piech families a stronger voice in deciding how Porsche should be governed.
Porsche IPO: The luxury automaker will sell shares for up to $75 billion.
When Porsche goes public on the stock market, Volkswagen (VW), the largest automaker in Germany, has stated that it hopes to value the luxury brand at up to $75 billion (APS65.8 billion).
The share sale is anticipated to be the second-largest initial public offering in Germany history (IPO).
Arno Antlitz, chief financial officer of VW, stated, “We are now in the home stretch with the IPO plans for Porsche and welcome the commitment of our cornerstone investors.
Volkswagen stated in a statement to investors that it will price Porsche’s preferred shares at a!76.50 to a!82.50 per share, giving the sports car manufacturer a stock market valuation of a!70 billion to a!75 billion.
The data revealed on Sunday, however, fell short of a!85 billion in prior valuation expectations as a result of investor apprehension over rising interest rates and a possible global recession.
With the money from the share sale, VW estimates that it will be able to pay for the transition to electric vehicles and spending on software development.
In December, if the IPO goes through, VW stated it will host a meeting for investors and propose giving shareholders a special dividend equal to 49% of the entire gross proceeds from the sale of their shares.
Even though relatively few businesses have issued shares in Europe this year due to the region’s energy crises, high inflation, and rate hikes, the deal was announced nonetheless.
The Porsche-Piech family, which handed over considerable decision-making authority to VW more than ten years ago, will pay a premium to buy shares under the IPO plan, which will give it back control of the legendary brand.
Risk in Ukraine
Volkswagen and the two families have a long history together; Ferdinand Porsche created the iconic VW Beetle, which helped fuel Germany’s post-World War II economic miracle. Later, his son Ferry founded the Porsche sports car firm, which introduced the 911.
The families sought a hostile takeover of Volkswagen, a considerably larger company, more than ten years ago. They intended to use the carmaker’s own war chest, much like a private equity firm might, to pay off the ensuing avalanche of debt.
When the financial crisis struck and banks refused to roll over their loans, the two clans were halfway through their strategy.
The families sold their cherished sports car brand to VW in two installments, first in December 2009 and then three years later, for a total of EUR8.4 billion in equity, as part of an emergency agreement that allowed them to avoid bankruptcy.
At the factory gates of his father’s home plant in Stuttgart, Wolfgang Porsche sobbed while promising workers that “the legend of Porsche lives and will never be destroyed” as he announced the outcome of the negotiations to save his father’s business at the time.
They will now repurchase a 12.5% interest in the business for an estimated 10.7 billion euros.
The purchase can still fall through, though, as VW places great importance on a high valuation.
Given that the business wishes to keep the remaining 75% to preserve complete control over the sports car manufacturer, offering a stake in Porsche is a one-time opportunity. There won’t be a second share sale.
According to Porsche SE’s finance officer Johannes Lattwein, if the dispute continues for a long time, it “may have ramifications for an IPO.”
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Porsche: Is it still a part of 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.
Does VW own Porsche entirely?
VW owns Porsche, right? Yes, Porsche’s parent company is Volkswagen Group. In 2011, Volkswagen and Porsche amalgamated. The parent business of numerous other luxury automobile manufacturers, such as Audi, Bentley, Bugatti, and Lamborghini, is the Volkswagen Group.
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.
Porsche under VW’s control?
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.