Porsche Initial Public Offering

Since first hearing that Volkswagen was considering listing Porsche AG, I was excited at the prospect of owning a small piece of Porsche.

Before investing, however, I wanted to understand the offer in further detail and the complex ownership structures of Volkswagen and Porsche following the public listing.

Background

Porsche AG is one of the most successful luxury sports car manufacturers in the world.

Six key models are produced by Porsche AG, including the 911 and 718 sports cars, Taycan electric sports car, Panamera luxury car, together with Macan and Cayenne SUV’s.

The company produced over 300,000 vehicles in 2021, which marked a new all time record, and an increase of approximately 11% from the prior year. The brand remains strong in Europe, the Americas and China, currently its largest market.

Porsche AG has previously advised combustion engines will always be offered in conjunction with the production of electric vehicles. This approach is to be achieved via a “carbon neutral” balance sheet and ongoing investment in new and cleaner eFuels. The company also invests in autonomous driving software, battery technology and recycling, together with vehicle charging infrastructure.

Listing

Porsche AG successfully completed its initial public offering (IPO) on the Frankfurt Stock Exchange on 29 September 2022. The listing was one of the largest in European history, with a current market valuation of €100.87bn or approximately $AU156.14bn. Volkswagen floated 12.5% of Porsche AG, raising approximately €9bn for the group.

Porsche AG with capital totalling 911 million shares overall was split into two halves, comprising ordinary shares and preference shares. The ordinary shares are not listed and remain with Volkswagen.

Up to 25% of the preference shares were listed in the IPO, worth 12.5% of the company. Retail investors make up only 7.7% of the shares made public.

Other new shareholders include the Qatar Investment Authority, Abu Dhabi’s sovereign wealth fund, Norway’s sovereign wealth fund, and investment banks including T Rowe Price. Preference shares hold no voting rights, but holders are prioritised for dividends.

Shares in the IPO were finally priced at €82.50 and the market subsequently opened at €84.00.

The share price has progressively increased since listing, and is currently trading at €110.95, representing capital growth of approximately 35% since listing some 54 days ago.

Ownership

Some 17 years ago, Porsche set out to discretely acquire shares in Volkswagen with a view to eventually gain complete control.

In 2009 Porsche was forced to relinquish the bid as the global financial crisis devastated markets worldwide. Volkswagen subsequently acquired Porsche. The recent IPO ironically provides the Porsche and Piëch families, direct descendants of company founder Ferdinand Porsche, ultimate control of Porsche AG, via their control of Porsche SE, which controls Volkswagen, which in turn controls Porsche AG.

€ Euro

Prepared by:

Andrew Dalton Secretary, Porsche Club Qld.