Porsche is worth 75 billion euros for its IPO – 09/29/2022 at 09:20


Inside the Porsche assembly plant in Stuttgart, Germany, on September 26, 2022 (AFP/THOMAS KIENZLE)

German luxury car manufacturer Porsche got off to a flying start on the Frankfurt Stock Exchange on Thursday, posting an initial quote above target, for one of the largest operations on the Frankfurt stock market despite a sad context.

The stock was taken at 84 euros, above the IPO price set at 82.50 euros, during its first listing at 07:15 GMT, valuing the Porsche group at more than 76 billion euros.

“A big dream has come true for Porsche,” commented Oliver Blume, boss of Porsche and Volkswagen, parent company of the sports car group, in a press release.

“Porsche, one of the most successful sports car manufacturers in the world, is entering a new era with increased business flexibility,” added the CEO.

At the Porsche headquarters in Stuttgart, Germany, on September 26, 2022 (AFP/THOMAS KIENZLE)

At the Porsche headquarters in Stuttgart, Germany, on September 26, 2022 (AFP/THOMAS KIENZLE)

The issuance volume makes it the second largest IPO in Germany after Deutsche Telekom in 1996 and the largest in Europe since 2011 along with Swiss commodities giant Glencore.

If Volkswagen puts only 12.5% ​​of the capital of its nugget on the stock market, the second largest automotive group in the world intends to take billions of money from it to inject into its expensive transition to electric and autonomous vehicle.

– Carrier luxury –

Porsche has a higher capitalization at the starting line than other German giants such as BMW (47 billion euros) and Mercedes-Benz (58 billion euros), which sell more cars than the Zuffenhausen firm, near Stuttgart ( south).

The operation is particularly unusual since, in recent months, IPOs have been rare in Europe in an environment marked by inflation, rising interest rates and the war in Ukraine.

Assembly of an electric Porsche Taycan at the group's factory in Stuttgart, September 26, 2022 (AFP / THOMAS KIENZLE)

Assembly of an electric Porsche Taycan at the group’s factory in Stuttgart, September 26, 2022 (AFP / THOMAS KIENZLE)

The Dax index of the Frankfurt Stock Exchange has lost almost a quarter of its value since the beginning of the year, with the automotive sector, struggling in terms of sales, largely neglected.

“This is not the best time for an IPO,” said German car expert Ferdinand Dudenhoeffer, who nevertheless sees this operation as a test of the “international value that German engineering”.

Volkswagen got the support of important shareholders of Porsche, such as the public investment funds of Qatar and Abu Dhabi, the Norwegian sovereign wealth fund and the American asset manager T. Rowe Price.

Together, they hold nearly 3.6 billion euros in preferred shares, of which Qatar accounts for the largest share.

The company’s prospects have a lot to do with it: Porsche has raised its operating margin target to a range between 17 and 18% and turnover should grow by 11 to 14% compared to 2021.

Porche operates within a luxury car sector that is expected to “grow 13% annually over the long term”, according to Berenberg analysts.

The multiple winner of the 24 Hours of Le Mans brand is converting its range to electric, with the sporty Taycan born in 2019 and of which almost 20,000 copies were sold from January to June, a new electric SUV Macan expected in 2024 and the launch. in another half-decade SUV.

– Influence of Porsche and Piëch clan –

Porsche is currently owned 100% by the Volkswagen group, which is controlled by the Porsche SE holding company, the wealth of the Porsche and Piëch families will strengthen their base through this IPO.

Inside the Porsche assembly plant in Stuttgart on September 26, 2022 ( AFP / THOMAS KIENZLE )

Inside the Porsche assembly plant in Stuttgart on September 26, 2022 ( AFP / THOMAS KIENZLE )

In addition to the so-called preferential shares – without voting rights – that the investors took, Volkswagen sold 25% of the capital and a share to Porsche SE, which has a blocking minority in the sports car manufacturer.

Volkswagen will collect a total windfall of around 19 billion euros, half of which will be used for investment in electricity with six battery cell factories planned in Europe and software for electric and autonomous vehicles. vehicle.

The Wolfsburg group, whose title has lost 23% since January, also hopes that the partial sale of Porsche will boost its own stock market value by around 84 billion euros, a fraction of its rival’s weight. American Tesla. , worth about $900 billion.

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