Porsche, the luxury car worth 77 billion euros

Volkswagen’s luxury car subsidiary raised 9.4 billion euros on Thursday. It is the biggest IPO in Europe since 2011.

By Olivier Ubertalli

The brand of luxury cars is valued at 75 billion euros.
The brand of luxury cars is valued at 75 billion euros.
© MARIJAN MURAT / DPA / dpa Picture-Alliance via AFP

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Porchestra. A name. A prestigious brand that has become essential in the automotive industry. And now one of the biggest IPOs in European history. The most important since 2011. And the second in Germany, after that of the operator Deutsche Telekom in 1996. The manufacturer of the legendary 911, a subsidiary of the German automobile giant Volkswagen, burst onto the financial markets this Thursday, September 29. From the first exchanges on the Frankfurt Stock Exchange, the Porsche AG share exceeded 84 euros, valuing the brand at around 77 billion euros, which makes it one of the first market capitalizations on the planet, behind Tesla, Toyota and Volkswagen.

The IPO price was set at 82.50 euros per share, at the top of the range announced, between 76.50 and 82.50 euros. With nearly 114 million shares on sale, which correspond to 12.5% ​​of its capital, Porsche has raised more than 9.4 billion euros. This jackpot is to finance the electrification of the Stuttgart group, while 40% are already electrified (100% electric or rechargeable hybrids), with in particular the successful debut of the fully electric Taycan. By 2030, Porsche aims to sell 80% of electric vehicles.

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Under the leadership of Oliver Blume, Porsche boss who became the 1er September that of Volkswagen, world number two in the automobile industry with its twelve brands (Volkswagen, Audi, Porsche, Lamborghini, Bugatti, Bentley, Seat, Skoda, Volkswagen Commercial Vehicles, Man, Scania and Ducati), the capital of the car manufacturer de luxe has been symbolically divided into 911 million titles, in homage to the 911, of which the Carrera model is the best known.

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Only preferred shares without voting rights are listed. Reference shareholder of Volkswagen, Qatar must rise to 2.5% of the capital of Porsche. The sovereign wealth funds of Norway (Norges Bank Investment Management) and Abu Dhabi (ADQ) and the investment fund T Rowe Price, also announced that they subscribed to the operation for a total of 1.8 billion euros. euros. The Piëch-Porsche family is taking advantage of the operation to consolidate its power with a blocking minority in Porsche AG, VW holding 75% of the voting rights.

A very profitable brand with strong growth

Like the luxury automobile sector, Porsche is now in insolent financial health. Its turnover jumped 15% last year, to 33 billion euros. Its profitability reached 16%, ie an operating profit of… 5.3 billion euros. The brand broke its sales record in 2021. For the first time in its history, it sold more than 300,000 units worldwide. China is the leading market, with a third of sales. The most marketed model is not the 911, but the Macan, a compact SUV based on the same platform as the old Audi Q5 and whose starting price is around 67,000 euros. The Cayenne is the group’s second success.

Porsche’s IPO is a litmus test for Oliver Blume. With now his double hat at the head of Volkswagen and its subsidiary of luxury cars, he will have to do as well as the late Sergio Marchionne, the Italian boss who achieved the feat of driving the wheel of Fiat Chrysler and Ferrari with talent.

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