Volkswagen Group is in advanced talks with Porsche Automobil Holding SE, the group’s biggest stakeholder, over a future IPO of the sports car maker, and the two have established a framework agreement to serve as the foundation for such a step, according to a statement from VW.
In the Frankfurt trade, VW’s preferred shares increased by up to 9.2 percent. VW has been working for years to embrace a less centralized corporate framework in order to become more agile and to level the playing field with Tesla Inc. It introduced electric vehicles like the ID.4 and the Porsche Taycan, but its market capitalization is still dwarfed by Tesla.
According to Bloomberg Intelligence, Porsche may be worth between 60 billion euros and 85 billion euros ($96 billion), compared to the present market valuation of the group as a whole, which is approximately 112 billion euros. Aside from the primary VW vehicle brand and Porsche, the German automaker owns nameplates such as Audi, Lamborghini, and Bentley.
A separate Porsche listing might provide the organization with a fresh source of cash. Because its complicated shareholder structure limits possibilities to raise additional equity capital, such as Tesla has done, without eroding shareholdings of important stakeholders who control about 90 percent of VW’s voting stock, VW relies heavily on earning enough cash on its own or issuing bonds.
After Bloomberg News and German media revealed negotiations regarding an IPO, VW CEO Herbert Diess appeared to deny a Porsche listing around a year ago. However, Porsche executives have openly addressed the possibility of giving one of the world’s most sought automobile brands more autonomy.