Potential IPO for sports car manufacturer would raise funds for VW Group's electrification plans
Porsche Panamera family
The VW Group is pushing ahead with plans to list Porsche on the stock market, with both companies’ boards of management agreeing on a framework for the process.
A final decision remains subject to “several different parameters as well as general market conditions”, but the parent company said the sports car brand’s flotation would be an important factor in the VW Group’s transition to “a vertically integrated mobility group and leading provider of software-based and emission-free mobility”.
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In terms of share division, the listed portion of Porsche AG would be split in two: 50% ordinary shares, with voting rights, and 50% preference shares – which give early access to dividend payouts.
Up to 25% of the preferred shares will be placed on the market as part of the initial IPO process, with Porsche Automobil Holding – owned by the Porsche and Piëch families – would get 25% plus one share of the ordinary shares (for a premium of 7.5%), thereby giving the families the ability to veto strategic decisions.
The ordinary shares would not be offered on the stock market, and Volkswagen AG would continue to hold a majority stake.
Importantly, VW Group said: “The industrial cooperation between Volkswagen AG and Porsche AG would continue after an IPO”, meaning plans for EV platform-sharing and co-development will continue.
The Qatar Investment Authority (QIA), which VW Group says “has been a valuable and trusted partner as well as a major shareholder of Volkswagen AG for many years”, intends to acquire a proportion of the preferred shares.
As part of the IPO process, around 130,000 employees of Volkswagen AG and VW Sachsen GmbH – the division which runs the group’s EV factory in Zwickau – would receive a one-time payout of €2000 (£1670) each.
VW Group CEO Herbert Diess said: “The automotive industry is changing fundamentally. Volkswagen is determined to play a leading role in a world of zero-emission and autonomous mobility.
‘We have set the right course with our New Auto strategy and thanks to our substantial cash flows will invest with clear focus to enter new profit pools such as battery & charging, autonomous driving and our own mobility platform in the next few years.
“An IPO of Porsche AG would give us additional flexibility to further accelerate the transformation. Porsche AG would gain more entrepreneurial freedom and at the same time continue to benefit from group synergies.”
Porsche would be the latest in a succession of performance brands to go public. Volvo-owned Polestar is set to be listed on the Nasdaq later this year via a special-purpose acquisition company (SPAC) and Lotus recently confirmed that it plans to float its EV division, China-based Lotus Technology.
Reports emerged last year that the Volkswagen Group could float Porsche as a means of funding its transition to all-out electrification across its multi-brand portfolio.
According to the Financial Times, it has the potential to be one of Germany’s biggest public offerings in recent years, and Bloomberg Intelligence estimates a valuation of €85 billion (£71bn) for Porsche.
Porsche has been part of the Volkswagen Group for a decade and consistently contributes a significant proportion of the company’s profits.
The Volkswagen Group recently pledged to invest £76bn in new technology over the next four years as part of its electrification ambitions.
Specific investments include a second production line for the Volkswagen ID 3, a new manufacturing facility in Wolfsburg, new flagship EVs from Volkswagen and Audi and six new EV battery factories across Europe by 2030.
Keyword: Volkswagen Group agrees framework for Porsche flotation