Nothing stops Volkswagen (VLKAF) .
Not Russia’s energy war against the European Union. Moscow decided to cut off gas supplies to Europe ahead of the cold autumn and winter months due to the countries’ support for Ukraine, which Moscow invaded on February 24.
This energy crisis will undoubtedly cause household electricity bills to soar, which in turn risks further weakening Europe’s already faltering economies.
The German multi-brand automaker is also not fazed by central banks’ unclear plans to tackle the world inflation.
These geopolitical and macroeconomic issues tend to undermine investor confidence, which remains cautious rather than buying risky assets, such as company shares.
In such circumstances, companies often choose to delay investment projects and not embark on major transactions.
Porsche’s IPO will take place in 4 weeks
Volkswagen doesn’t seem perturbed by any of this, or even by its internal struggles that led to the dismissal of chief executive Herbert Diess in July.
Diess has been replaced by Porsche boss Oliver Blume, who is the cash cow for the firm based in Wolfsburg, Germany.
The automaker has just confirmed its intention to give Porsche its independence through an IPO.
This IPO will take place in Frankfurt at the end of September or the beginning of October, specifies the company.
Volkswagen reminds investors that the transaction is. “subject to further developments in the capital market.” He does not elaborate.
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“The board of directors and the supervisory board are aiming for an IPO,” Volkswagen said in a statement that you can find here.
Preferred shares will also be offered to retail investors in countries across Europe, an attempt to tap into Porsche’s loyal fan base.
Volkswagen has also approved a 25% plus one share stake in ordinary shares of Porsche AG for sale to Porsche SE. It would give the controlling Porsche and Piech families a blocking minority stake and bolster their push for a tighter leash on the automaker.
“In the event of a successful IPO, Volkswagen AG will convene an extraordinary general meeting in December 2022 at which it will propose to its shareholders that a dividend amounting to 49% of the total gross proceeds from the offering of the preferred shares and the sale of the common shares will be distributed to shareholders in early 2023,” the company said.
Play catch-up with Tesla
Investors expect a valuation of €60 billion to €85 billion ($59.4 billion to $84.1 billion). But some experts also point out that the valuations of other European luxury flagships, such as Ferrari (RACE) and Aston Martin (AMGDF) have decreased significantly.
Ferrari’s market capitalization is currently $35 billion. But Porsche produces more cars than Ferrari, which plays more on rarity and exclusivity.
If the IPO were valued at 85 billion euros, it would be the largest IPO in Germany and the largest in Europe since 1999, according to Reuters.
Volskwagen’s eagerness to pull off Porsche’s IPO also reflects the two brands’ race to catch up with Tesla. (TSLA) in the electric vehicle market.
VW hopes the transaction will provide it with additional funds to accelerate its efforts to offer more electric models and develop its own software.
The German automaker wants to spend 89 billion euros ($88.1 billion) on developing electric vehicles over the next five years. The other ambition is to see sales of electric vehicles represent a quarter of the group’s total sales from 2026.
For the moment, the group sells far fewer electric vehicles than Tesla, the world’s number one in the sector.
Volkswagen also hopes that by parting ways, Porsche will have a freer hand to compete more sharply with Tesla and other luxury electric vehicle makers like Lucid. (LCID) ,
In 2021, Porsche sold 301,915 vehicles, with 41,296 (less than 14%) being the all-electric Taycan. The EV outsold the sports car icon Porsche 911 (38,464 units). The automaker wants 80% of its sales to be electric vehicles by 2030.