Shares of luxury automaker Porsche AG increased on their first day of public trading following one of the biggest initial public offerings in European history by German parent firm Volkswagen, which raised 9.4 billion euros ($9.1 billion).
After Volkswagen lined up investors to acquire shares for a minority position in the manufacturer of the 911 sports car and Cayenne SUV, shares traded at 85.68 euros on the Frankfurt Stock Exchange on Thursday, above the initial selling price of 82.50 euros set Wednesday.
In order to keep up with the global auto industry's focus on the energy transition, Volkswagen aims to utilize the funds to invest in software and electric vehicles.
The IPO was a gamble into unsteady markets as worries of a recession have grown in important economies like Europe and the U.S. due to the conflict in the Ukraine, inflation, increasing interest rates, and a worldwide oil shortage. Last Monday, the Stoxx 600 index for Europe entered a bear market.
In spite of this, investors bought shares at the top of the first offer range, drawn by Porsche's high-profit margins and recession-proof luxury sector.
Along with money manager T., the sovereign wealth funds of Qatar, Norway, and Abu Dhabi invested. Price, Rowe.
Porsche's largest shareholder, Wolfsburg-based Volkswagen, which also owns the car businesses Audi, Lamborghini, SEAT, and Skoda, will continue to have a controlling stake in the company. However, the transaction is meant to offer Porsche more freedom.
Oliver Blume, CEO of Volkswagen, will continue to hold both positions in addition to his prior position as CEO of Porsche.
As part of the offering, non-voting shares representing 12.5% of Porsche were offered to investors. The Porsche and Piech families, descended from Ferdinand Porsche, were represented by Porsche Automobil Holding SE, which also purchased another 12.5% plus one share in voting shares as part of the acquisition for a 7.5% premium. With 53% of the voting shares, their stake is also Volkswagen's controlling shareholder.
After Porsche made an unsuccessful offer for Volkswagen and ended up heavily in debt, Volkswagen acquired Porsche in 2012.
The two blocks of shares were sold for a combined amount of 19.5 billion euros. A dividend of 49% of the sum will be given to Volkswagen stockholders. VW may use the remaining money to support its investments in cutting-edge technology.
As the global auto industry transitions to electric cars in accordance with a global focus on reducing greenhouse gas emissions, and as software development plays an ever-growing part in that change, Volkswagen may use that money to invest in new factories, technologies, and business lines.
According to statistics gathered by financial market data provider Refinitiv, the transaction ranks third among Europe's largest share offers, after only the $12.5 billion sale by Deutsche Telekom in 1996 and the $16.6 billion offering by Italian electrical utility Enel in 1999.
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