5 things to know about the Porsche IPO

5 things to know about the Porsche IPO

From the Volkswagen group to its own ticket, Porsche will travel on its own to the public unlike the parent company. A large operation, which risks presenting itself as financial event of the year for European markets. On the evening of September 5, Volkswagen AG said the group had “decided today, with the approval of the Management Board”, to agree to an independent IPO of a Porsche subsidiary. The operation is expected to “late September or early October”.

1/ Appreciation

On this occasion, international finance could risk turning its eyes to Europe with this operation, which would bring an already valuable juggernaut to the stock market. between 60 and 85 billion euros. It’s not every day a company of this size goes public. To give an example, the Renault group today has a weight of 8.25 billion euros. With between 60 and 85 billion euros, Porsche is close to BNP Paribas (€57 billion) and Airbus (€76 billion) in France.

2/ Greater freedom

To move forward, the Management Board had to wait two families behind Volkswagen AG agrees. Namely the Porsche and Piëch families, which own 31.4% of the shares and 53.3% of the voting rights in Porsche SE, the financial company that controls the entire group. Finally, make sure “more freedom” of Porsche in its projects, they were able to secure a certain agreement. The capital of the subsidiary will be divided twice. On the one hand 50% of preferred stock (dividends but no voting rights) and 50% of common stock (voting rights).

For the general public, it will be possible to buy the preferred shares as Volkswagen said in a press release that they will be offered in France, Switzerland, Austria and Spain. With common shares, the two families behind Porsche SE will block any takeover attempt as long as they still have 25% “plus one share” to ensure control.

Oliver Blume, CEO of Porsche (and Volkswagen since September 1, 2022) © Porsche

3/ Do like Tesla

If Porsche has more weight than the Renault group or other car manufacturers, the company is still. very small compared to Tesla ($846 billion). The American manufacturer bet very early on the financial markets and the speculation about its future enabled it to get capital and leverage, enough to finance its projects and implement them (especially the opening of new factories and getting component contracts). Porsche wants to do the same. Indeed, the company wants to be able to exceed 100 billion dollars very quickly. The current context is not the most favorable, but many investors from venture capital can see in Porsche an opportunity to invest in a company that is weaker than others.

4/ Financing the transition period

Porsche has entered a new era, marked by the energy transition, which will continue to burn billions. The new money raised from the IPO should not take long to be used. Porsche is preparing for its arrival New electric SUVs, along with its current Taycan (electric sedan and station wagon). Then, it will be the turn of the legendary 911 to turn to a new engine. In addition, it is planned a 911 Turbo e-Hybrid starting this year, along with the “Sarafi” (raised) variant of the legendary German coupe.

5/ Two actions, one CEO

Porsche only separates from Volkswagen in the financial markets. Others are not affected. In addition, since September 1, the two brands have been further integrated when Oliver Blume, CEO of Porsche, has also taken over as head of Volkswagen. He replaces Herbert Diess, and has been widely talked about for his ability to think of alternative ways of electricity. As a reminder, Oliver Blume has put his hand in Porsche’s wallet to invest in synthetic oil – its full production is planned for 2026.