Porsche IPO could value car maker at $84bn

Despite volatile markets, Volkswagen AG chose to move through with its intention to list a minority stake in Porsche this year, opening the door for what may turn out to be one of Europe’s largest initial public offers.

According to a statement released by VW on Monday following a meeting of its supervisory board, the manufacturer plans to launch the initial public offering around the end of September or the start of October, depending on future events in the capital markets. The largest automaker in Europe hopes to complete the listing before the end of the year.

“This is a historic moment for Porsche,” VW and Porsche Chief Executive Officer Oliver Blume said. “We believe that an IPO would open a new chapter with greater independence for us as one of the world’s most successful sports-car manufacturers.”

13 years after being compelled to sell the sports car industry to Volkswagen, the wealthy Porsche and Piech family is poised to restore direct control over what was once their family firm with the share sale. Porsche Automobil Holding SE attempted to seize control of the much larger Volkswagen more than ten years ago, but the audacious plot failed when money dried up amid the financial crisis.

VW and Porsche intend to replace their so-called domination agreement, which distributes profits and losses to the parent, with a cooperation agreement as part of the IPO.

Volkswagen seeks to raise money to support its ambitious investment ambitions in electric cars and ground-breaking new digital technologies, even though the family will soon have more control over Porsche. The strategy is dealing with some of the most difficult market conditions in recent memory, where a stagnant public listing market is partly due to the weakening economy, rife inflation, and rising energy prices.

The Porsche family, which owns a 53 percent voting stake in Volkswagen through its investment company Porsche Automobil Holding, plans to purchase a blocking minority holding of 25 percent plus one share, while investors will be able to buy preferred shares in Porsche that do not have voting rights. Volkswagen will continue to own the remaining voting stock.

Bloomberg News reported last month that Porsche has secured investor interest for its IPO at a valuation of up to 85 billion euros ($84 billion), despite market turbulence. According to the persons, who declined to be named because the conversations are private, the company that makes the electric Taycan and the 911 sports vehicle has pre-orders that exceed the shares that are being offered at a valuation between 60 billion and 85 billion euros.