The recession is looming in Germany. The war continues in Ukraine. Inflation continues to gallop. Interest rates are rising. Energy prices are skyrocketing…it’s really not a time to put a company on the stock market. And yet, despite this very unfavorable situation, Frankfurt is preparing to celebrate Thursday the biggest IPO of the century: that of Porsche, one of the most profitable manufacturers in the world. This operation, which values the famous brand of sports cars between 70 and 75 billion euros – more than the French Renault and Stellantis combined! – should bring more than 9 billion euros to its owner (Volkswagen). It is the largest in Europe for more than ten years and the fifth in the history of the continent after Enel (Italy), Deutsche Telekom (Germany), Rosneft (Russia) and Glencore (Switzerland).
It is all the more spectacular as initial public offerings have become very rare in recent years. “The volume is gigantic. The operation is historic. confirms Ingo Speich, head of the sustainable development and governance department at Deka Investments (savings bank asset management). The action should cost around 80 euros. And Porsche was to establish itself as one of the largest market capitalizations on the continent. The success of the operation is assured thanks to the institutional investors for whom we have already reserved a share of the cake: Qatar (Volkswagen’s reference shareholder), the Norwegian sovereign wealth fund which manages the country’s oil revenues, the American asset management T. Rowe Price and the Abu Dhabi investment fund ADQ.
“The balance of power will not change”
Everything was done in such a way that no one was harmed. The reference shareholders will always have the wheel, the « Porsche clan » will regain its place on the supervisory board of the company of its ancestors, Volkswagen will raise funds to finance its costly transition to the electric car and the 38,000 Porsche employees will cash in each a bonus of 6,000 euros… Behind this spectacular IPO, it is primarily the interests of the grandchildren of Ferdinand Porsche – inventor of the Beetle and manufacturer of panzers in the service of the Nazi war machine – which are served . A sleight of hand that arranges the affairs of this family of billionaires whose holding company (Porsche SE) negotiated everything upstream to obtain a blocking minority at Porsche (25% plus one share).
“The balance of power will not change. The Porsche family remains in control of the game,” summarizes Ingo Speich. This very discreet family will continue to control Volkswagen, of which it owns 53% of ordinary shares (with voting rights). And Volkswagen will remain a 75% shareholder of Porsche. « The boss of Volkswagen is only an employee of the Porsche family”, recalls Ferdinand Dudenhöffer, director of the Duisburg Automotive Research Center. The other reference shareholders of Volkswagen are the region of Lower Saxony (20%) and Qatar (17%).
But investors take a dim view of the double role of Oliver Blume, who manages both Porsche and Volkswagen. The question of “good governance” arises: “His predecessor was already struggling to deal only with Volkswagen. How do you expect it to properly handle two constructors at the same time?” laments Ingo Speich. « We therefore risk conflicts of interest: when choices have to be made, for example for the development budget between Porsche and Audi, it is always Volkswagen who will have the last word », he adds. “The two roles complement each other perfectly,” retorted Oliver Blume who earns more than a million euros in Wolfsburg (headquarters of the Volkswagen group) and 800,000 in Stuttgart (headquarters of the Porsche house).
With the listing of Porsche in Frankfurt, Volkswagen also intends to boost its own action. The German car giant is indeed small on the stock market compared to its competitors. The first European manufacturer weighs only 87 billion euros while its American rival Tesla, leader of the electric car, today exceeds 900 billion dollars (923 billion euros). Moreover, Volkswagen needs to invest. The manufacturer wants to produce more than 80% of fully electric cars by 2030. « Six [giga-usines de batteries électriques] have been planned in Europe for one billion euros each”, points out Ferdinand Dudenhöffer. The manufacturer must also invest fortunes to catch up in the development of its on-board software and wants to strengthen its mobility services (hence the acquisition of the rental company Europcar this summer).
Finally, going public allows it to avoid a capital increase to find funds. “For political reasons, Volkswagen has never sought money from banks that want to enter the capital. This solution would mean that the region of Lower Saxony would lose its influence and, with it, the powerful metalworking union IG Metall”, Ferdinand Dudenhöffer analysis. However, this kind of revolution has never been on the agenda in the Porsche family.