Volkswagen AG Pressing Potential Porsche IPO

Volkswagen Group is apparently in talks with Porsche Automobil Holding SE about a potential initial public offering (IPO) for the Porsche luxury/sports brand. According to a statement from VW, the duo has already negotiated the agreed-upon frameworks and is in final discussions as to when they want to move forward.

Weeks of rumor preceded corporate confirmation, making it seem like the proposed deal was already a shoo-in. But any final decisions will still need to be approved by the management and supervisory boards — something Volkswagen Group said has yet to happen.

From VW:

Volkswagen AG and Porsche Automobil Holding SE are currently in advanced discussions regarding a potential IPO of Dr. Ing. h.c. F. Porsche AG. For this purpose, Volkswagen AG and Porsche Automobil Holding SE negotiated a Framework Agreement which should form the basis for further steps in the preparation of a potential IPO of Dr. Ing. h.c. F. Porsche AG.

The conclusion of the Framework Agreement is subject to the approval of the Management Board and the Supervisory Board of Volkswagen AG. A final decision have not yet taken.

Whether a Framework Agreement is concluded and its content as well as the question if an IPO of Dr. Ing. h.c. F. Porsche is being further assessed, is currently open and depends on the approval of both parties’ boards.

The media has been talking about a Porsche IPO for years, so everyone is expect it to be huge. As a result, the mere suggestion that the brand could go public sent Volkswagen shares up by roughly 10 percent before the day was through.

Bloomberg reported, citing unnamed sources, that investors would likely be offered about 25 percent of non-voting shares in Porsche while the Porsche–Piëch family scoops up a minority blocking stake. It estimated the hypothetical listing resulting in a brand value of 85 billion euros, making everyone very rich while also helping to smooth over Volkswagen’s prolonged history of internal power struggles.

The timeline for the IPO is anybody’s guess. But Bloomberg, which seems to have a lot of knowledge on the subject, suggested that we could see a listing by the second half of 2022. Frankly, it seems more plausible than any claim that VW’s corporate structure will suddenly be made less hectic. Both the State of Lower Saxony and Qatar Investment Authority own sizable shares of the automaker and government influence has a tendency to muddle these kinds of negotiations. Though Porsche SE holds the majority with 53.3 percent of Volkswagen Group.

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