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Friday, January 27, 2023

Porsche IPO reportedly still on the table

Volkswagen Group may be looking at a spinoff of its Porsche subsidiary in a quest to raise funds for its extensive electric vehicle and software development programs.

Citing two people familiar with the matter, Reuters reported on Tuesday that VW Group is still exploring a potential initial public offering of Porsche AG, the sports car manufacturer and not the Porsche SE holding company which is owned by the Porsche and Piech families and is the controlling shareholder of VW Group.

According to the sources, no decision on taking Porsche public has been made, due in part to VW Group’s complex shareholder structure.

Germany’s Handelsblatt also reported on Tuesday that the Porsche and Piech families were looking to sell some of their shares in VW Group in order to purchase shares in a public Porsche, in an effort to regain their direct ownership in the sports car manufacturer.

Via the Porsche SE holding company, the families own 31.4% of VW Group and have 53.3% of the voting rights. According to Handelsblatt, the families would remain the biggest shareholder in VW Group after any potential share sale. The next biggest shareholder is the German state of Lower Saxony which holds 11.8% of the shares and 20% of the voting rights.

VW Group CEO Herbert Diess said in October that the automaker was constantly reviewing its portfolio, when quizzed by Reuters about a Porsche IPO.

It’s not the first time we’ve heard the suggestion of a Porsche spinoff. In 2018, Porsche Chief Financial Officer Lutz Meschke floated the idea during a media event for the launch of the Taycan. Reports from earlier in the year also claimed VW Group could float as much as 25% of Porsche—a move estimated to generate between $24 billion and $30 billion.

We’ve also seen a number of automakers go public in the past 12 to 18 months, either via IPOs or SPAC deals. Some have been quite successful, such as the IPO of Rivian and the SPAC deal of Lucid.

VW Group last year was rumored to be looking at a spinoff of its Lamborghini subsidiary, though the automaker last December said it will keep Lamborghini along with Bentley and Ducati. It did however transfer the ownership of Bugatti to a new joint venture split 45/55 between Porsche and Croatian EV technology company Rimac.

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