The moment has come.
Volkswagen (VLKAF) It will give independence to its famous brand Porsche despite the turmoil currently rocking the markets due to uncertainty about the health of the global economy in the grip of record inflation.
Volkswagen announced in a press release on September 18 that the sports car brand will be listed on the stock market on September 29. It will be on the Frankfurt Stock Exchange in Germany.
For this deal, the German giant wants to raise between 8.71 billion euros and 9.39 billion euros ($8.71 billion to $9.4 billion). The automaker will price Porsche’s preferred stock at between €76.50 and €82.50 per share, which would translate into a valuation between €70 billion and €75 billion ($70.1 billion and $75.1 billion).
The third largest IPO in Europe?
At the upper end of the range, it will be the third largest IPO in Europe after Refinitiv.
Volkswagen said that despite the current market turmoil, some major investors have already confirmed that they will participate. The Qatar Investment Authority, the sovereign wealth fund of the State of Qatar, ADQ (the authorized partner of the Abu Dhabi Government), the Norwegian sovereign wealth fund, T. Rowe Price mutual fund company will subscribe for up to 3.7 billion euros of preferred shares.
“We are now in the first phase of plans for an IPO for Porsche and welcome the commitment of our core investors,” said Volkswagen Chief Financial Officer and COO Arno Antlitz.
The IPO also marks the return to business of the Porsche-Piech family, which lost control of the sports car brand several years ago. In fact, the family will receive 25% plus one common Porsche share with voting rights, while investors will be able to receive 25% of non-voting Porsche preferred shares.
All of this means that the Porsche-Piech family will have a disabled minority stake, which will allow them to influence strategic decisions at a time when Porsche is determined to compete fiercely with Tesla. (TSLA) in the luxury and luxury electric vehicle segment.
The family is back
It said in a separate statement that the Porsche-Bich family will acquire 25% at a premium of 7.5% and will finance the operation with a capital of 7.9 billion euros.
Volkswagen plans to use part of the proceeds from this deal – between €18.1 billion and €19.5 billion – to fund its offensive in electric cars and the development of its technologies, particularly self-driving.
The German manufacturer wants to invest 89 billion euros to develop electric vehicles over the next five years. Its other ambition is to see electric vehicle sales account for a quarter of the group’s total sales starting in 2026.
At the moment, the group sells far fewer electric cars than Tesla, the number 1 in the world in this segment.
Volkswagen also hopes that by splitting up, Porsche will have a freer hand to compete more sharply with Tesla and other luxury electric car makers like the Lucid. (LCID) .
In 2021, Porsche sold 301,915 cars, 41,296 (down 14%) of which were all-electric Taycans. The EV has sold more than the iconic Porsche 911 sports car (38,464 units). The automaker wants 80% of its sales to be electric cars by 2030.