By listing it on the Frankfurt Stock Exchange, Volkswagen has made a bold move to unleash the potential of its Porsche brand. The German carmaker has sold up to 25% of its preferred shares in Porsche in an initial public offering (IPO) that could value the company at up to $75 billion. The IPO is expected to be one of the largest in Europe and Germany's history and a milestone in Volkswagen's transformation into a leading provider of smart mobility solutions.
Porsche is one of the most profitable and prestigious brands in the automotive industry, with a loyal fan base and a strong heritage of innovation and performance. The company sold 272,162 vehicles in 2022, up 13% from 2019, despite the impact of the pandemic. Its operating profit margin was 15.4%, well above the industry average. Porsche is also at the forefront of electrification, with its Porsche Taycan model being one of the best-selling electric vehicles in Europe and the US.
By spinning off part of Porsche, Volkswagen aims to unlock its value and use the proceeds to invest in new technologies and acquisitions. The IPO will also give Porsche more entrepreneurial freedom and flexibility to pursue its own strategy and growth opportunities while still benefiting from the synergies and scale of the Volkswagen Group. Volkswagen will retain a majority stake in Porsche and continue to cooperate closely with it on various projects, such as battery development and autonomous driving.
The IPO has been well received by investors and analysts, who see Porsche as a rare opportunity to invest in a premium brand with strong growth prospects and a clear vision for the future of mobility. The price range for the preferred shares was set at €76.50 to €82.50 per share, valuing Porsche at €70 billion to €75 billion ($81 billion to $87 billion). The IPO was priced at the upper end of the range on Sept. 29 and started trading on Sept. 30. The shares gained 5% on their first day of trading, reaching €86.78 at one point.
The IPO has also been welcomed by Volkswagen's shareholders and employees, who will benefit from the transaction. Volkswagen will pay a special dividend of 49% of the total gross proceeds to its shareholders, which include the Porsche-Piech families, who own 53% of Volkswagen's voting rights, and Qatar Holding LLC, which owns 17%. The employees of Volkswagen AG will also receive a one-time payment of €2,000 per employee as a reward for their contribution to the Group's success.
The IPO of Porsche is a significant step in Volkswagen's transformation from a traditional car manufacturer to a vertically integrated mobility group that offers software-based and emission-free mobility solutions. Volkswagen has launched its NEW AUTO strategy, which aims to increase its share of electric vehicles to over 50% by 2030 and achieve net zero emissions by 2050. Volkswagen also plans to expand its presence in new profit pools such as battery & charging, autonomous driving and its own mobility platform.
The IPO of Porsche is not only a historic event for Volkswagen and Porsche but also for the entire automotive industry. It signals a new era of mobility, where design, technology and sustainability are key drivers of value creation and customer satisfaction. It also shows that Volkswagen is determined to play a leading role in this transformation and leverage its diverse portfolio of brands and capabilities to achieve its vision. Porsche is not only a winner on the racetrack but also on the stock market.
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