Shares of luxury carmaker Porsche AG rose on its first day of trading after German parent company Volkswagen raised 9. 4 billion euros ($9. 1 billion) in one of the largest initial public offerings in European history.
The shares were trading at 85. 68 euros on the Frankfurt Stock Exchange on Thursday, above the initial value of 82. 50 euros set on Wednesday after Volkswagen covered up investors to buy shares for a minority stake in the 911 sports car maker and SUV Cayenne.
Volkswagen plans to use it to invest in software and electric cars as the global auto industry focuses on the energy transition.
The initial public offering is an adventure in turbulent markets, as the war in Ukraine, inflation, emerging interest rates and a global energy crisis heightened recession fears in major economies such as Europe and the United States. Europe’s Stoxx Sixhund index fell into bearish territory last week. . .
Still, investors took stocks at the higher end of the initial offering range, attracted by Porsche’s strong profit margins and recession-resistant luxury business.
The state investment budget of Qatar, Norway and Abu Dhabi has taken holdings, such as fund manager T. Rowe Price.
Wolfsburg-based Volkswagen, whose other car brands are Audi, Lamborghini, SEAT and Skoda, will remain Porsche’s majority shareholder and the companies’ business cooperation will continue. However, the sale aims to give more autonomy to Porsche.
Volkswagen CEO Oliver Blume, who held his previous position at the helm of Porsche, will continue in this role.
As a component of the offer, 12. 5% of Porsche was sold to investors in the form of non-voting percentages. As a component of the transaction, 12. 5% plus a voting percentage was purchased at a premium of 7. 5% through Porsche Automobil Holding SE, on behalf of Porsche. and the Piech families, descendants of automotive pioneer Ferdinand Porsche. Its corporate holding company is also the majority shareholder of Volkswagen with 53% of the voting percentages.
Volkswagen took over Porsche in 2012 after Porsche made a failed bid for Volkswagen and went into debt.
Total proceeds from the sale of the two blocks of shares amounted to €19. 5 billion. Of this amount, 49% will be paid as a dividend to Volkswagen shareholders. The rest is left to VW to fund its long-term investments in technologies.
Volkswagen can use this money to invest in new plants, technologies and industries as the global automotive industry turns to electric cars in line with the global focus on reducing climate-altering greenhouse fuel emissions and software progression plays a vital role in this shift.
The deal is among Europe’s largest inventory offerings: Italian electric app Enel in 1999, valued at $16. 6 billion, and Deutsche Telekom in 1996, valued at $12. 5 billion, according to figures compiled by money market knowledge provider Refinitiv.
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