Volkswagen to list its Porsche brand as separate company

WORLD  30 September 2022 - 05:00

When a massive cargo ship loaded with Porsches, Bentleys, Lamborghinis and Volkswagens burned for nearly two weeks before sinking in the Atlantic Ocean earlier this year, it could have been taken as a bad omen.

But Volkswagen, which owned the vehicles, was preparing an initial public offering of Porsche and was not fazed by the luxury disaster. Now the automaker has gone ahead with its plans announced in February to set its Porsche subsidiary free on the Frankfurt Stock Exchange, DW reports.

Volkswagen's decision to list its valuable Stuttgart-based Porsche brand as a separate company is expected to bring in billions. At the start of trading on September 29, its shares rose to €84, which values the company at €76 billion and is slightly above company predictions. It also makes the company more valuable than competitors BMW and Mercedes, and almost as valuable as all of VW now.

In the end, Porsche's move is one of the biggest IPOs ever in Europe. This is especially noteworthy at a time of otherwise dreary economic outlook, volatile stock markets, rising interest rates and high inflation. A lot was resting on tiny Dr Ing. h.c. F. Porsche AG, as the company is officially known, is proving its worth.

In the end, the VW-Porsche split is not a real divorce, but something more like a partial separation. Volkswagen is more interested in unlocking Porsche's true potential and will only offer a portion of the stock and hold on to the majority.

Half the shares will be nonvoting preferred shares and the other half ordinary shares with voting rights. Of that, 25% of preferred shares are set aside for investors, which means about 12.5% of the entire company will be open to investors who have no voting rights.

VW's biggest shareholders, the Porsche and Piëch families, will buy 25%-plus-one of the ordinary shares, again about 12.5% of the entire company.

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