Porsche Planning IPO Worth Up To $110 Billion

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VW Group as a whole is valued at around $97 billion.

Back in 2009, then Porsche CEO Wendelin Wiedeking made a bold attempt to take over the VW Group that ultimately failed. He was then fired. Following that boardroom fiasco, VW assumed control of Porsche, while the Porsche and Piech families became extremely influential investors. They didn't want another outsider to attempt something like that again and instituted safeguards through a complex shareholder arrangement. It's worked just fine ever since but it might have to be unraveled in order to do something quite significant.

Automotive News Europe reports that the possibility of a Porsche IPO remains a very real possibility and it could be worth between $55 billion and $110 billion. To put that into some perspective, the VW Group as a whole has an estimated value of about $97 billion.

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VW Group management is in no immediate hurry to list Porsche because the premium sports car brand continues to bring in lots of money that's needed to help fund its aggressive electrification strategy. The massive success of the Porsche Taycan proves buyers are willing to accept fully electrified Porsches. Other Group brands like Audi and the namesake Volkswagen are also seeing excellent initial EV sales. But listing Porsche could potentially bring in even more money for the automaker - if it secures a good deal.

The Piech and Porsche families will have to cooperate because they currently own more than half of the voting rights through their holding company, Porsche Automobil Holding SE. They also have a 31.4 percent equity stake in the VW Group.

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Basically, the families need to be presented with a good deal that would compensate them for giving up control of Porsche once it becomes a publicly-traded company. One possibility reportedly being explored is a formula where the families would gain a direct and significant stake in the namesake VW brand at the expense of outside investors. They want some element of control without outside interference, just like they currently have with Porsche.

But why issue a Porsche IPO in the first place? Because the brand is extremely valuable by itself. Fiat Chrysler recognized the same situation with Ferrari several years ago. Today, the Italian supercar brand is valued at $52.5 billion, which is more than Honda ($46.9 billion) and Hyundai ($46.8 billion).

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Source Credits: Automotive News Europe

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