VW begins reviewing Porsche IPO

Created: 02/24/2022Updated: 02/24/2022 21:23

The Porsche logo.

© Christoph Schmidt/dpa/symbol image

The top committees of the VW Group have in principle approved an IPO for the subsidiary Porsche.

The feasibility will now be specifically examined after approval by the Executive Board and with the support of the Supervisory Board in Wolfsburg.

This was announced by the largest car company in Europe on Thursday evening.

Wolfsburg/Stuttgart - It's about Porsche AG, in which the operative business of the Stuttgart sports and off-road vehicle manufacturer is bundled.

The company is a key profit generator of the VW Group.

If the company is successful on the trading floor, half its share capital should be split into common and preferred shares - up to a quarter of the preferred stocks could then be publicly traded.

In this case, the umbrella company Porsche SE (PSE) would receive a stake of 25 percent plus one share of the voting trunks.

In the separate AG, nothing would probably go against the owner families Porsche and Piëch.

The PSE, in turn, is the center of power in the Wolfsburg-Stuttgart network.

It holds a good 53 percent of the voting rights in the Volkswagen Group and is controlled by the two clans.

With the IPO, these would again have more direct access to the car manufacturer with their name.

On Tuesday, after long speculation, VW and PSE officially indicated for the first time that shares in Porsche AG could soon be released on the financial market.

On the one hand, this issue should make it easier to finance further investments, especially in e-mobility, software and networking technologies.

On the other hand, VW boss Herbert Diess is pursuing a fundamental increase in the value of the group.

Porsche as a pearl of return and a separate investment opportunity could also promote this goal from the point of view of some large investors.

After the reference to "advanced talks" and an agreement on the key points, the following was said about the further steps: "The actual feasibility of an IPO depends on a large number of different parameters as well as the general market conditions.

Final decisions have not yet been made.” If that happens, the shareholders will receive a special dividend.

Even after that, however, Porsche should definitely remain part of the entire VW group.

How such a maneuver would affect the overall balance remains to be seen.

Should something shift in the PSE shares in VW, the share of Lower Saxony - the second largest shareholder - could also change.

The home state has far-reaching special rights via the VW law, but was initially reserved about the plans.

The State Chancellery in Hanover initially said they did not want to comment on the internals of the Supervisory Board.

dpa