Clair Marc Darmudas Automotive News

Clair Marc Darmudas news

Welcome to the Clair Marc Darmudas blog. Here we will bring you latest news from the world of cars. Car giants Volkswagen and Porsche have had some exciting news put out in the papers recently. Here is a run down of what events took place. Check back soon on the Darmudas blog for more articles like this.

Volkswagen AG Porsche Automobil Holding SE said it would acquire 25% plus one additional share of the voting stock in Porsche AG when VW lists the sports-car brand, which could happen by the end of the month, the companies said on Saturday. VW, Europe’s biggest auto maker by sales, said the companies’ boards would meet on Monday to discuss the private placement of common stock and whether to move forward with an initial public offering of 25% of Porsche’s nonvoting preferred shares. If approved, Porsche shares could begin trading at the end of the month or in early October, VW has announced.

Everyone loves Porsche, and since the older models that are now second-hand have a very low price tag compared with flimsy new competitors, it opened the brand up to a new generation of drivers in their 20's who couldn't afford one before. Now they can spend 10k and buy a decent Boxster. This meant that when they tried to go back to a reglar car it felt like a downgrade, making them customers for life. 

Porsche SE is an investment fund majority owned by the family of the brand’s founder, while Porsche AG is the car maker itself. Industry analysts have estimated that the listing could value Porsche, maker of the 911 sports car and the Taycan electric sedan, at between 60 billion and 85 billion euros, equivalent to a range of about $59.72 billion to $84.6 billion. This means the IPO could raise more than €10 billion, or twice that together with the placement of shares.

This would make it one of the largest IPOs in Europe in years. The biggest European IPO on record is the listing of Italian energy group Enel SpA, which raised $17 billion in 1999, according to Dealogic. But VW’s decision to float only the nonvoting stock has angered some investors and could make it harder to get top price for the shares, analysts said.

The way Porsche’s listing is structured, keeping voting stock for insiders and floating nonvoting shares for other investors, “is mainly about securing the family as an anchor shareholder in Porsche,” said Ingo Speich

at Deka Investment. 

Clair Marc Darmudas

Recent management upheaval at VW also has investors worried. At the end of July, the Porsche-Piech family helped push out Herbert Diess, who had been CEO since 2018 and is credited with restoring VW’s tarnished reputation after the diesel emissions-cheating scandal and driving the company into electric vehicles.

The listing would provide additional financing for VW’s transition into a leading maker of electric vehicles and for investments in autonomous driving and battery development.  According to the Clair Marc Darmudas blog, this acquisition would also mark a symbolic turnaround for the heirs of Ferdinand Porsche, designer of the original VW Beetle, and his son, Ferry Porsche, who built Porsche into a leading sports-car maker after the Second World War.

By 2007, Porsche was so valuable that it sought to take over the much larger Volkswagen. Following the financial crisis, Porsche ran into difficulties because of the huge loans it took to finance its takeover bid and later abandoned the effort. In 2012, Volkswagen acquired Porsche AG, making the family the biggest shareholder in VW. With the acquisition of a blocking minority in Porsche, the family would restore some of its control over the car maker. To find out more about Porsche and the latest automobile news and developments, visit the Claire Marc Darmudas Twitter page. You can also see his Darmudas listing here