FRANKFURT/BERLIN -- Volkswagen Group and its top shareholder Porsche Automobil Holding SE have entered a framework agreement for a possible stock market listing of iconic sports car brand Porsche, edging closer to what could become one of the world's largest stock market debuts.
The potential IPO could happen as soon as the fourth quarter of 2022, Arno Antlitz, the chief financial officer of parent Volkswagen Group, said.
Outlining the key steps of such a transaction, Antlitz said VW would update markets about the progress and timeline of a listing in late summer.
“The actual feasibility of an IPO depends on several different parameters as well as general market conditions,” VW said in a statement on Thursday. “No final decisions have yet been taken.”
The announcement comes on the heels of Russia’s invasion of Ukraine, which has sparked volatility across world markets and concerns of higher energy prices.
Europe’s biggest automaker announced two days ago it mapped out a framework for a possible deal and was in advanced talks about an IPO of the group’s most profitable division. An offering would lift the group’s valuation and help fund its shift toward electric cars.
"For me, this marks an inflection point and the ideal timing for the potential transaction in order to ignite our EV shift momentum," VW Group CEO, Herbert Diess, said.
The planned listing, estimated to value Porsche at as much as 85 billion euros ($95.3 billion) by Bloomberg Intelligence, would partly reverse a tumultuous takeover of the Stuttgart-based company more than a decade ago.
VW revealed more details of a possible IPO on Thursday. The brand’s share capital would be split 50 percent between preferred shares, which don’t carry voting rights, and 50 percent common shares with voting rights.
Up to 25 percent of the preferred shares could be sold on the capital market and Porsche Automobil Holding, the main investment vehicle of the Porsche and Piech billionaire owner family, would acquire 25 percent plus one share of the ordinary shares. This would give the family a blocking minority on strategic decisions.
Volkswagen will propose the distribution of a special dividend in case of a successful IPO amounting to 49 percent of the total gross proceeds. This would help the Porsche and Piech families to finance their acquisition of the direct stake in what used to be their family enterprise.
Reuters contributed to this report.