From the Volkswagen group to its own ticket, Porsche will fly on its own by going public separately from its parent company. A colossal operation, which risks presenting itself as financial event of the year for European marketplaces. On the evening of September 5, Volkswagen AG said the group had “decided today, with the approval of the Supervisory Board”, to agree to an independent IPO of the subsidiary Porsche. The operation is expected for “late September or early October”.
1/ Valuation
For the occasion, global finance risks turning its eyes on Europe and this operation, which would bring an already valued juggernaut onto the stock market. between 60 and 85 billion euros. It’s not every day that a company of this size goes public. To give an example, the Renault group today weighs 8.25 billion euros. With a range between 60 and 85 billion euros, Porsche is approaching BNP Paribas (57 billion €) and Airbus (76 billion €) in France.
2/ Greater independence
In order to move forward, the Supervisory Board had to wait for the two families behind Volkswagen AG agree. Namely the Porsche and Piëch families, which hold 31.4% of the shares and 53.3% of the voting rights in Porsche SE, the financial holding company which controls the entire group. Finally, to ensure “greater independence” of Porsche in its projects, they managed to find a point of agreement. The capital of the subsidiary will be divided in two. With on one side 50% preferred shares (dividends but no voting rights) and 50% ordinary shares (voting rights).
For the general public, it will be possible to buy preferred shares as Volkswagen said in a press release that they will be offered in France, Switzerland, Austria and Spain. For ordinary shares, the two families behind Porsche SE will block any takeover attempt as long as they will still hold 25% “plus one share” to guarantee control.
Oliver Blume, CEO of Porsche (and Volkswagen since September 1, 2022) © Porsche
3/ Do like Tesla
If Porsche weighs much more than the Renault group or other car manufacturers, the company is nevertheless ridiculously small compared to Tesla ($846 billion). The American manufacturer bet very early on on the financial markets and speculation around its future enabled it to garner capital with a ladle, enough to finance its projects and carry them out (in particular the opening of new factories and the securing contracts for components). Porsche wants to do the same. It is certain that the company wants to be able to very quickly exceed 100 billion dollars. The current context is not the most opportune, but many investors coming out of venture capital could see in Porsche an opportunity to invest in a company that is less fragile than the others.
4/ Financing the transition
Porsche has entered a new era, marked by the energy transition, which will continue to burn billions. The fresh money recovered from the IPO should not take long to be used. Porsche is preparing for the arrival of its new electric SUVs, in addition to its current Taycan (electric sedan and station wagon). Then, it will be the turn of the mythical 911 to turn to new engines. Moreover, it is planned a 911 Turbo e-Hybrid starting this year, in addition to a “Sarafi” (raised) variant of the mythical German coupe.
5/ Two actions, one CEO
Porsche only distances itself from Volkswagen in the financial markets. The rest is not affected. Moreover, since September 1, the two brands are even more linked when Oliver Blume, CEO of Porsche, has also taken over as head of Volkswagen. He replaces Herbert Diess, and has been talked about a lot for his potential to imagine alternatives to electric. As a reminder, Oliver Blume has put his hand in Porsche’s wallet to invest in synthetic fuel – its full production is planned for 2026.
