Porsche is potentially going public as early as the last quarter of 2022. That is the news coming out of Volkswagen's management and supervisory boards today. Specifically they are assessing making an initial public offering (IPO) with a publicly traded share issue that would release funds to VW Group. It has the potential to become a record listing in Germany, although VW Group would retain a majority stake in Porsche AG and cooperation between Porsche AG and VW Group AG would continue.
The move has the backing of the State of Lower Saxony, which is a major shareholder in Volkswagen, with a representative saying, "The planned IPO of Porsche offers considerable opportunities for the further development of the VW Group as a whole and, above all, its Lower Saxony sites. That is why the state agrees with the presented framework agreement and will accompany the further process constructively."
The IPO of Porsche AG is part of VW Group's New Auto strategy. VW Group is under pressure to address its sprawling structure and multiple brands, which include Audi, Lamborghini and Ducati. Its complexity is seen as depressing the share price of Europe's largest carmaker. VW Group's board of management believes that the listing would transform Volkswagen into a "vertically integrated mobility group and leading provider of software-based and emission-free mobility."
The actual feasibility of an IPO depends on several issues and the general market conditions, so a final decision has yet to been made. In the event of the IPO happening, it would mean shareholders receiving a special dividend of 49 per cent of total gross proceeds, and Volkswagen AG employees getting a one-off payment of 2,000 euros each.
Herbert Diess, CEO of Volkswagen AG, said "The automotive industry is changing fundamentally. Volkswagen is determined to play a leading role in a world of zero-emission and autonomous mobility. 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"
The assumed market value of Porsche is 90 billion euros, which could result in proceeds of around 23 billion euros for Volkswagen. Porsche AG would not receive any proceeds under the current plans, but Porsche SE, which owns 31.4% of Volkswagen, would stand to receive 3.6 billion euro. Porsche SE is the holding company of the Porsche and Piech families, which has 53.3% of Volkswagen's voting rights.
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