Wed. Sep 28th, 2022

The Volkswagen Group is making its Porsche subsidiary public via an initial public offering and on Sunday it confirmed that the offering period will begin on September 20 and run until an expected closing date eight days later.

The VW group will value the shares in a range from 76.50 euros to 82.50 euros per share, which at the higher price limit will value Porsche at 75 billion euros (about 75 billion dollars). The shares will be listed on the Frankfurt Stock Exchange.

The valuation, while small compared to Tesla, is larger than the market capitalization of other German carmakers such as BMW (49 billion euros) and Mercedes-Benz (61 billion euros) and approaches the VW Group’s market capitalization of 88 billion euros.

“We believe Porsche AG, with its strong business model and compelling financial performance, is ready to launch its IPO,” Lutz Meschke, Porsche vice president and head of finance and IT, said in a statement.

Prior to the IPO, Porsche was split into 911 million shares, split equally between preferred and common stock. Preferred shares do not have voting rights but have higher dividends. Up to 113,875,000 preferred shares will be offered to investors in the IPO.

Porsche SE, the majority holding company owned by the Porsche and Piëch families, and the largest shareholder of the VW Group, plans to acquire 25% plus one share of the common stock at the preferred stock price plus a 7.5% premium, a move that will provide the holding company with a blocking minority and, consequently, affect all key decisions.

Sovereign wealth funds of Abu Dhabi, Norway and Qatar, as well as investment firm T. Rowe Price, will acquire preferred shares worth up to € 3.68 billion in total at the upper price limit, the VW Group said.

If the IPO is successful, the VW Group could follow an IPO of the newly established battery company PowerCo. Speaking at an investor presentation in July, VW Group chief financial officer Arno Antlitz said the battery company was formed so it could go public next year or 2024. PowerCo is responsible for global operations of VW Group batteries. The company has announced plans for six battery plants in Europe and is considering building plants in North America as well.

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