Volkswagen is considering a separate listing of its Porsche sports-car unit in a deal that could boost its valuation and bring in a significant amount of cash, according to people familiar with the matter.
The world’s second-largest carmaker is speaking with advisers to study the merits of a potential initial public offering or spinoff of Porsche, the people said, asking not to be identified discussing confidential information. VW could use any proceeds from a listing for acquisitions or technology investments, according to the people.
Chief Executive Officer Herbert Diess sounded the alarm News last month about Tesla Inc. and other electric-vehicle companies cashing in on optimism regarding their growth prospects. Investors have taken a dimmer view on VW and other incumbents, who will need to spend tens of billions to develop EVs while restructuring operations that revolve around combustion engines.
VW’s preferred shares rose as much as 5.7% in Frankfurt trading. At about $766 billion, Tesla’s market value is seven times higher than VW’s 89.5 billion euros ($108 billion).
A Porsche listing could take place next year, though no firm timetable has been decided, the people said. VW plans to keep a majority stake if it pursues an IPO of the business, according the people.
Deliberations are ongoing, and there’s no certainty they will lead to a transaction, the people said. A representative for VW declined to comment. Manager Magazin reported earlier Thursday that VW is weighing a listing of Porsche, citing unidentified people.
Such a move, if agreed on, would partially reverse an acquisition concluded in 2012, when Volkswagen bought the remaining 50.1% stake in Porsche’s automotive business for 4.46 billion euros. That step ended a seven-year takeover saga that divided two of the most powerful families in Germany.
The two companies agreed to combine in 2009 after Stuttgart-based Porsche racked up more than 10 billion euros of debt in an unsuccessful attempt to take over Europe’s largest carmaker.
If all goes well, This could boost Volkswagen’s stock price and at the same time Porsche IPO will be one of the most anticipated ones in a long time.
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