Volkswagen’s luxury car subsidiary raised 9.4 billion euros on Thursday. It is the largest IPO in Europe since 2011.
By Olivier Ubertalli
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Porchestra. A name. A prestigious brand that has become essential in the automotive industry. And now one of the largest IPOs in European history. The most important since 2011. And the second in Germany, after the operator Deutsche Telekom in 1996. The manufacturer of the legendary 911, a subsidiary of the German car giant Volkswagen, burst onto the financial markets on Thursday, September 29. From the first exchanges on the Frankfurt Stock Exchange, the Porsche AG share exceeded 84 euros, valuing the brand at around 77 billion euros, making it one of the first market capitalizations on the planet, behind Tesla, Toyota and Volkswagen.
The IPO price was set at 82.50 euros per share, at the top of the announced range, between 76.50 and 82.50 euros. With almost 114 million shares for sale, equivalent to 12.5% of its capital, Porsche has raised more than 9.4 billion euros. This jackpot will finance the electrification of the Stuttgart group, while 40% is already electrified (100% electric or rechargeable hybrids), with in particular the successful debut of the fully electric Taycan. By 2030, Porsche aims to sell 80% of all electric cars.
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Under the leadership of Oliver Blume, Porsche boss who became the 1steh September, Volkswagen, number two in the world in the automotive industry with its twelve brands (Volkswagen, Audi, Porsche, Lamborghini, Bugatti, Bentley, Seat, Skoda, Volkswagen Commercial Vehicles, Man, Scania and Ducati), the capital of the car manufacturer. de luxe has symbolically been divided into 911 million titles, in tribute to the 911, of which the Carrera model is the most famous.
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Only non-voting preference shares are listed. Reference shareholder in Volkswagen, Qatar to increase to 2.5% of Porsche’s capital. The sovereign wealth funds of Norway (Norges Bank Investment Management) and Abu Dhabi (ADQ) and the investment fund T Rowe Price also announced that they underwrote the operation for a total of 1.8 billion euros. The Piëch-Porsche family is using the operation to consolidate its power with a blocking minority in Porsche AG, where VW owns 75% of the voting rights.
A highly profitable brand with strong growth
Like the luxury car sector, Porsche is now in unabashed financial health. Its revenue rose by 15% last year to 33 billion euros. Its profitability reached 16%, i.e. an operating profit of… 5.3 billion euros. The brand broke its sales record in 2021. For the first time in its history, it sold more than 300,000 units worldwide. China is the leading market with a third of sales. The most marketed model is not the 911, but the Macan, a compact SUV based on the same platform as the old Audi Q5 and whose starting price is around 67,000 euros. The Cayenne is the group’s second success.
Porsche’s IPO is a litmus test for Oliver Blume. With his double hat now at the helm of Volkswagen and its luxury car subsidiary, he will have to do as well as the late Sergio Marchionne, the Italian boss who achieved the feat of running Fiat Chrysler and Ferrari with flair.
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