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Thursday, January 20, 2022

Volkswagen Group considering $142 billion Porsche IPO – report

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Volkswagen Group is still reportedly exploring a potential initial public offering (IPO) of Porsche.

As reported by Reuters, two people familiar with the matter said the Volkswagen Group could use the IPO as a way to fund its electric vehicle and software push.

Speculation of this potential IPO first arose in March 2021, with Bloomberg reporting Porsche CEO Oliver Blume expressed his openness to an IPO at a briefing with US media.

An undisclosed source told Reuters the reason why Volkswagen hasn’t gone ahead with the IPO just yet is due to a complex stakeholder set-up. They added it’s unclear if the listing will happen at all.

Reports of the potential listing estimate a standalone Porsche valuation between €45 billion (A$71 billion) and €90 billion (A$142 billion).

German publication Handelsblatt recently reported the Porsche and Piech families are considering selling part of their stake in Volkswagen to fund a possible IPO of Porsche AG, the automaker.

They control the holding company Porsche SE, the largest shareholder of Volkswagen Group with a 31.4 per cent stake in the German giant.

Through this holding company, they have 53.3 per cent of the voting rights in Volkswagen.

People familiar with the matter told Reuters in May 2021 the families were prepared to take a direct stake in Porsche should it be separately listed.

The second largest shareholder is currently the German state of Lower Saxony, which reportedly holds a 11.8 per cent equity stake and 20 per cent of voting rights.

The families reportedly could sell enough shares to raise roughly €15 billion (A$23.7 billion) and still be the largest shareholder.

If the Porsche and Piech families took a direct stake in Porsche it would loosen the grip the families have on Volkswagen.

Porsche SE told Reuters this potential Porsche IPO is “pure speculation”, whereas Volkswagen declined to comment.

When asked about a potential listing of Porsche in October, Volkswagen Group CEO Herbert Diess said Volkswagen was constantly reviewing its portfolio, but gave no further comment.

Volkswagen preference shares, which recently plummeted due to the Diess’ leadership kerfuffle, have reportedly closed up 8.6 per cent on Germany’s DAX index. Porsche SE shares reportedly closed 8.5 higher.

Diess is reportedly remaining at the at the helm of the Volkswagen Group after the special supervisory board came up with a solution to help ease tensions with labour unions.

“It is going in the direction that the dispute will be settled, and Diess will remain CEO,” said the undisclosed source.

Diess will reportedly focus on strategy but keep his job as CEO, while Volkswagen brand chief Ralf Brandstätter will become a member of the management board.

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