Volkswagen wants to take Porsche public. Porsche SE has officially confirmed the rumours circulating for some time. Volkswagen could use the proceeds of a Porsche IPO to finance the development of new electric models, among other things.
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Porsche Automobil Holding SE, which holds a 53 per cent majority stake in the Volkswagen Group, announced that it is currently in advanced discussions with Volkswagen AG on the critical points of a possible IPO of Dr Ing. h.c. F. Porsche AG. A final decision has not yet been made.
The Porsche SE holding company confirms that “subject to the results of these talks”, the executive bodies of the companies – i.e. the executive board and supervisory board of Volkswagen and Porsche SE – will decide on the possible vital points. In this case, as is usual in the Group, there are numerous overlaps in personnel. Hans Dieter Pötsch, for example, is involved in the talks both as Chairman of the Executive Board of Porsche SE and the VW supervisory board. The same applies to Manfred Döss, Board member for Integrity and Legal Affairs at VW and Porsche SE. Wolfgang Porsche and Hans Michel Piech sit on the Supervisory Boards of both companies.
Porsche says that even if corresponding board resolutions were to be passed, the implementation of the transaction would still be subject to further reviews, including final approval by the boards and general market developments. The company says it will inform the public and the capital market about other relevant developments per the legal provisions.
While Porsche SE, in which the Porsche and Piech families have pooled their shares in the VW Group, is being very cautious, as is usual in such announcements, it is not only the intermingling of personnel in the talks that suggests that they are now only a formality. According to the German business and trade newspaper Handelsblatt, the VW supervisory board is expected to pass a resolution in principle in a few days, which could start the preparations. The newspaper quotes company sources as saying that the matter is “ready for a decision”. It is said that “major banks and law firms have already been involved in the preparations”.
The Handelsblatt has also learned some details about the possible Porsche IPO: As with VW, there will probably be ordinary and preference shares. In a basic scenario, 20 to 30 per cent of the shares of Porsche AG could be traded on the stock exchange; the rest should remain in the ownership of VW. Porsche SE could hold a pre-sale right to the shares of Porsche AG. Through a double shareholding in Porsche AG – sometimes directly, via VW – Porsche SE and thus the Porsche and Piech families would increase their influence on the sports car manufacturer.
While the exact modalities of the Porsche IPO are still unclear, two crucial agreements have probably already been reached: The employee representatives on the VW supervisory board have probably been assured that no jobs will be endangered. In addition, the VW board has been assured that the expected billions in proceeds from the IPO will be invested in electromobility – for example, in the planned six battery cell factories in Europe.
Update 06 September 2022
Volkswagen’s plan to take Porsche public is going ahead. The Volkswagen Supervisory Board has decided to seek a public offer of up to 25 per cent of Porsche’s non-voting preference shares on the Frankfurt Stock Exchange (Prime Standard).
The Group targets the IPO for the end of this month or early October, subject to conditions on the capital markets. Volkswagen is seeking to implement the IPO and could use the proceeds, among other things, to finance the development of new electric models.
However, the decision is not yet final, as sources close to the negotiations told Reuters: “It would be the technical go-ahead, nothing more. It’s paving the way, but this would not guarantee that the stock market bell will ring in the end.” Investors expect a valuation between 60 billion and 85 billion euros ($60 billion to $85 billion); however, the European stock market remains volatile as a result of the conflict in Ukraine.
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