Volkswagen Considers Listing Minority Stake in Porsche--Update

By William Boston 

BERLIN -- Volkswagen AG is considering listing as much as 25% of its sports car maker Porsche AG, a move that analysts say could boost the market value of the entire VW group and raise cash needed for investment in electric vehicles and new technology.

The idea of listing Porsche or luxury car maker Audi is not new within VW's top management, but people familiar with the company's thinking said that the conversation within VW has taken on a new quality as the company pivots hard toward electric vehicles and sees its market value dwarfed by new tech rivals such as Tesla Inc.

Still, the discussions are still at a very early stage, they said, adding that if Volkswagen decided to move forward with the listing, it might not happen until next year.

Shares in VW were up almost 4% to EUR167.80 in late afternoon trading on the Frankfurt stock exchange.

VW declined to comment.

It is unclear how much a listing could raise for VW, but a recent report by Bernstein Research analyst Arndt Ellinghorst estimated that Porsche's Taycan electric car business alone could be worth as much as EUR40 billion compared to VW's market capitalization of EUR87 billion. Porsche is on its way to be a nearly pure electric car company by 2025.

As the global battle for leadership in the nascent market for electric cars and self-driving vehicles intensifies this year, conventional auto makers are facing off with newcomers like Tesla and tech giants such as Apple that have piles of cash or huge stock market valuations allowing them to use their shares as currency for acquisitions.

Conventional auto makers such as VW are trying to squeeze as much cash out of their operations as possible, but are still stuck holding stock that investors do not value as highly as their upstart rivals.

As a result, they have increasingly sought to unlock value by loosening their conglomerate structures and selling or listing peripheral businesses to improve their overall market values.

Earlier this month, Daimler AG said it would split into two companies and spin off a "significant majority" of its truck business to Daimler shareholders by the end of the year. The move follows Volkswagen's decision to list its truck division, Traton SE, in 2019.

Analysts have been pressing Volkswagen to take further steps and list Porsche and Audi. VW recently squeezed out Audi's few remaining minority shareholders, but it is not clear if VW is also considering a separate listing for Audi.

The news of a possible Porsche listing was first reported by Germany's Manager Magazine.

Write to William Boston at [e-mail]

(END) Dow Jones Newswires

February 18, 2021 12:00 ET (17:00 GMT)

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