Volkswagen selling Lamborghini?
Discussion
VW already talked to the Street for the early interest of an IPO of Lambo. Bugatti cannot survive as a stand alone company without inter-group cash support. Ducati is too small to matter for VW's balance sheet. Bentley is likely to be sold in the future too. But lambo has the strongest product momuntum at the moment (Urus lead time is getting longer and longer). So it makes sense for VW to take advantage of this to do something about lambo first.
Aston martin IPO disaster is due to its weak balance sheet. AM should have raised equity during the IPO. Instead, its IPO was purely for the PEs to cash out, i.e. only secondary share sales, which did not raise the valuable cash to fund its SUV project and to prepare for Brexit. last month AM was forced to issue $150M debt at 12% yield to raise cash after it took an emergency loan in summer. What a disaster! I cannot think of any company which needed 2 rounds of rescue financing within 12 months of its IPO!! The bankers who advised the AM's IPO should all be fired. The valuation at IPO was so expensive that it can benchmark against Ferrari. But AM is not Ferrari. Just look at the residual value of each brand's cars.
But being a public company may not be good for consumers. Just look at Ferrari, launching new models like no tomorrow. When Ferrari announced F8, some were still waiting for their 488 to be delivered!
Aston martin IPO disaster is due to its weak balance sheet. AM should have raised equity during the IPO. Instead, its IPO was purely for the PEs to cash out, i.e. only secondary share sales, which did not raise the valuable cash to fund its SUV project and to prepare for Brexit. last month AM was forced to issue $150M debt at 12% yield to raise cash after it took an emergency loan in summer. What a disaster! I cannot think of any company which needed 2 rounds of rescue financing within 12 months of its IPO!! The bankers who advised the AM's IPO should all be fired. The valuation at IPO was so expensive that it can benchmark against Ferrari. But AM is not Ferrari. Just look at the residual value of each brand's cars.
But being a public company may not be good for consumers. Just look at Ferrari, launching new models like no tomorrow. When Ferrari announced F8, some were still waiting for their 488 to be delivered!
Edited by 430SD_LP640 on Saturday 12th October 18:56
On paper the brand looks strong but for a successful IPO they'll need more than the Urus to convince investors which means they'll be forced to talk electrification soon than later. There's also been rumours of a 2+2 in the works, with a IPO I would imagine they would push forward and add a 4th model.
My biggest fear is if a Chinese buyer comes around and offers to buy the brand. This would be disastrous.
My biggest fear is if a Chinese buyer comes around and offers to buy the brand. This would be disastrous.
Btw, here's the article for anyone who hasn't read it yet....
Volkswagen AG is weighing options for its Lamborghini supercar brand, as the German manufacturer moves ahead with an overhaul aimed at more than doubling its market value and getting ahead of an expected industry shakeout, according to people familiar with the matter.
The options VW is mulling include a sale or stock listing, said the people, who asked not to be named because the deliberations are confidential and no decisions have been made. Chief Executive Officer Herbert Diess plans to focus future expansion on the group’s main global brands -- VW, Porsche and Audi -- in a push to channel resources more efficiently and avoid duplicated efforts.
A Volkswagen representative declined to comment. The German automaker’s American depositary receipts climbed as much as 5.7% to $17.84 in New York trading.
Lamborghini’s stretch from supercars to roomier sport utility vehicles probably has helped boost its valuation to about $11 billion, making it a viable candidate for an initial public offering, analysts at Bloomberg Intelligence estimated in August. Sales of the Urus SUV have soared since its introduction in mid-2018. A redesigned Aventador and new hybrid supercar slated to hit the market next year may help boost margins beyond 30%, BI’s Michael Dean and Gillian Davis wrote in a report.
Diess’s Target
Investors have long urged Volkswagen, the world’s biggest automaker, to free up assets whose value is subsumed within a cumbersome structure that includes everything from Italian supercars to motorcycles and heavy trucks. While Ferrari NV, once part of Fiat Chrysler, is now worth about $30 billion, VW’s powerful labor unions have stood in the way of similar moves in Germany.
Diess, who took the helm in April 2018, has shown some success, completing an IPO of the Traton truck unit earlier this year, and has gained backing for the planned sales of units that make large diesel engines and transmissions. He’s also forged a broad alliance with Ford Motor Co. on commercial vehicles and electric-car and self-driving technology.
The 60-year-old CEO often emphasizes the urgency of maximizing VW’s value as it contends with a costly technology transition, and recently key members of VW’s founding Porsche-Piech clan have voiced support. He’s targeting a market value for Volkswagen of 200 billion euros ($220 billion), the people said, from about 81 billion euros now. His efforts are aimed at helping VW defy the auto industry’s current gloom and keep both existing peers and new rivals from the technology industry at bay.
In a Post-WeWork IPO World, New Age Auto Startups Are Now at Risk
In intense debates earlier this year, VW’s top management decided against pursuing the sale of units like Bugatti for now, partly because it was unclear if sub-scale assets could be divested without paying cash on top, according to one person. Still, smaller nameplates might face reshuffling going forward.
VW has started preparations to fold Lamborghini into a separate legal entity and the process might conclude toward the end of next year, according to the people.
— With assistance by Eyk Henning
https://www.bloomberg.com/news/articles/2019-10-11...
Volkswagen AG is weighing options for its Lamborghini supercar brand, as the German manufacturer moves ahead with an overhaul aimed at more than doubling its market value and getting ahead of an expected industry shakeout, according to people familiar with the matter.
The options VW is mulling include a sale or stock listing, said the people, who asked not to be named because the deliberations are confidential and no decisions have been made. Chief Executive Officer Herbert Diess plans to focus future expansion on the group’s main global brands -- VW, Porsche and Audi -- in a push to channel resources more efficiently and avoid duplicated efforts.
A Volkswagen representative declined to comment. The German automaker’s American depositary receipts climbed as much as 5.7% to $17.84 in New York trading.
Lamborghini’s stretch from supercars to roomier sport utility vehicles probably has helped boost its valuation to about $11 billion, making it a viable candidate for an initial public offering, analysts at Bloomberg Intelligence estimated in August. Sales of the Urus SUV have soared since its introduction in mid-2018. A redesigned Aventador and new hybrid supercar slated to hit the market next year may help boost margins beyond 30%, BI’s Michael Dean and Gillian Davis wrote in a report.
Diess’s Target
Investors have long urged Volkswagen, the world’s biggest automaker, to free up assets whose value is subsumed within a cumbersome structure that includes everything from Italian supercars to motorcycles and heavy trucks. While Ferrari NV, once part of Fiat Chrysler, is now worth about $30 billion, VW’s powerful labor unions have stood in the way of similar moves in Germany.
Diess, who took the helm in April 2018, has shown some success, completing an IPO of the Traton truck unit earlier this year, and has gained backing for the planned sales of units that make large diesel engines and transmissions. He’s also forged a broad alliance with Ford Motor Co. on commercial vehicles and electric-car and self-driving technology.
The 60-year-old CEO often emphasizes the urgency of maximizing VW’s value as it contends with a costly technology transition, and recently key members of VW’s founding Porsche-Piech clan have voiced support. He’s targeting a market value for Volkswagen of 200 billion euros ($220 billion), the people said, from about 81 billion euros now. His efforts are aimed at helping VW defy the auto industry’s current gloom and keep both existing peers and new rivals from the technology industry at bay.
In a Post-WeWork IPO World, New Age Auto Startups Are Now at Risk
In intense debates earlier this year, VW’s top management decided against pursuing the sale of units like Bugatti for now, partly because it was unclear if sub-scale assets could be divested without paying cash on top, according to one person. Still, smaller nameplates might face reshuffling going forward.
VW has started preparations to fold Lamborghini into a separate legal entity and the process might conclude toward the end of next year, according to the people.
— With assistance by Eyk Henning
https://www.bloomberg.com/news/articles/2019-10-11...
If Lamborghini were to ipo would it still be able to benefit from platformsharing with other VW entities particularly Audi? Ferrari has had an impressive ascent since it IPOed and there was alot of value released by extracting it from Fiat Chrysler but it certainly looks toppy now even though the brand value is undoubtedly the strongest in any sector of the car market.
Looks like it's not happening...
olkswagen denies plans for sale or stock listing for Lamborghini
2 Min Read
(Adds denial from Volkswagen)
FRANKFURT, Oct 13 (Reuters) - Volkswagen on Sunday said that it has no plans for a sale or an initial public offering of luxury brand Lamborghini, after Bloomberg reported that it was considering shedding the unit.
Bloomberg reported here on Friday that Volkswagen was readying to fold Lamborghini into a separate legal entity, in a process that may wind up toward the end of next year, and to focus VW's future expansion on the group’s main global brands Volkswagen, Porsche and Audi.
“There are no plans for a sale or IPO of Lamborghini. Speculation to this effect is unfounded”, a Volkswagen spokesman told Reuters on Sunday.
Volkswagen chief executive Herbert Diess in March said the company was reviewing its portfolio of brands, which also include Ducati and Bentley, and whether to divest some non-core businesses.
Last month, Diess said the company was working to free up resources for the development and mass production of electric cars.
Streamlining the brand line-up at the world’s biggest automaker could limit prospects for smaller and less geographically diversified divisions such as Skoda and Lamborghini, Bloomberg reported on Friday, citing people familiar with the matter.
Volkswagen had aggressively expanded under the leadership of Ferdinand Piech, who was chief executive and chairman between 1993 and 2015, acquiring Bentley, Bugatti and Lamborghini in a single year. (Reporting by Nivedita Balu in Bengaluru Editing by Leslie Adler and Elaine Hardcastle)
olkswagen denies plans for sale or stock listing for Lamborghini
2 Min Read
(Adds denial from Volkswagen)
FRANKFURT, Oct 13 (Reuters) - Volkswagen on Sunday said that it has no plans for a sale or an initial public offering of luxury brand Lamborghini, after Bloomberg reported that it was considering shedding the unit.
Bloomberg reported here on Friday that Volkswagen was readying to fold Lamborghini into a separate legal entity, in a process that may wind up toward the end of next year, and to focus VW's future expansion on the group’s main global brands Volkswagen, Porsche and Audi.
“There are no plans for a sale or IPO of Lamborghini. Speculation to this effect is unfounded”, a Volkswagen spokesman told Reuters on Sunday.
Volkswagen chief executive Herbert Diess in March said the company was reviewing its portfolio of brands, which also include Ducati and Bentley, and whether to divest some non-core businesses.
Last month, Diess said the company was working to free up resources for the development and mass production of electric cars.
Streamlining the brand line-up at the world’s biggest automaker could limit prospects for smaller and less geographically diversified divisions such as Skoda and Lamborghini, Bloomberg reported on Friday, citing people familiar with the matter.
Volkswagen had aggressively expanded under the leadership of Ferdinand Piech, who was chief executive and chairman between 1993 and 2015, acquiring Bentley, Bugatti and Lamborghini in a single year. (Reporting by Nivedita Balu in Bengaluru Editing by Leslie Adler and Elaine Hardcastle)
RSbandit said:
If Lamborghini were to ipo would it still be able to benefit from platformsharing with other VW entities particularly Audi? Ferrari has had an impressive ascent since it IPOed and there was alot of value released by extracting it from Fiat Chrysler but it certainly looks toppy now even though the brand value is undoubtedly the strongest in any sector of the car market.
There would have to be some form of guarantee of platform sharing I would think....no idea how you would do that but they have obviously benefitted massively from sharing a 4x4 platform in the case of the Urus. Not sure who developed the V10 used by Lambo and Audi. Urus us doing really well but it’s going to have competition very soon.
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