Volkswagen in advanced talks on Porsche IPO

Volkswagen in advanced talks on Porsche IPO

Volkswagen AG (VOW GR) announced in a press release on Tuesday that the parent of Porsche Automobil Holding SE is currently in advanced discussions regarding a potential IPO of the luxury car maker. The move could result in one of the largest German IPOs in recent years.

The conclusion of the Framework Agreement, outlining the further steps in preparation for the IPO, is still subject to approval by the Management Board and Supervisory Board of Volkswagen. The company reports that a final decision has not yet been made and the meeting is due to take place next month.

The preferred shares of Volkswagen on the Frankfurt Stock Exchange surged as much as 10% when the news broke. It has been suggested that an IPO of Porsche would help to boost the valuation of Volkswagen in a push to fund their lineup of electric cars, challenging the U.S. EV leader Tesla. According to the Financial Times, VW needs further funding for battery factorys and the procurement of necessary materials.

Bloomberg Intelligence has estimated that Porsche could be valued between $68bn to $96bn, while the Financial Times reports that the company may be worth up to $227bn, far exceeding the market capitalisation of its parent, which stands at about $125bn.

 

Sources:
Bloomberg
Financial Times
Volkswagen Press Release (German)