Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The Porsche-Piëch family, which controls Volkswagen, is taking advantage of declining market valuations to expand its investment portfolio.
Porsche SE, the family-controlled investment vehicle, on Tuesday said it was considering “potential further investments”.
“The current stock market environment and the resulting overall decrease in company valuations are creating attractive opportunities,” said Johannes Lattwein, the company’s board member for finance and IT.
Porsche SE was founded in 2007 when the family split its holding company from carmaker Porsche AG, which in the preceding years had begun a controversial attempt to take over what was then the world’s largest carmaker.
The financial crisis of 2008 hobbled Porsche’s ambition, and the sports car maker ended up eventually swallowed by VW. But the deal left the Porsche and Piëch families with effective control over VW, with Porsche SE owning 53 per cent.
The company this week announced it had invested “a low double-digit million amount” as part of an investment consortium led by Swedish private equity firm EQT that acquired a 35 per cent stake in the Munich-based Flix, which offers low-cost international bus fares.
Lutz Meschke, the Porsche SE board member responsible for investment management and chief financial officer or Porsche AG, at the time said he saw “great growth potential for sustainable and affordable mobility services in the future”.
The corporate structure that allows the Porsche and Piëch families to control Volkswagen is notoriously convoluted, oft criticised by the carmaker’s shareholders.
When carmaker Porsche AG listed in 2022, the family regained direct control over the eponymous brand by buying 25 per cent of voting shares, a blocking minority.
Aside from its core holdings in VW and Porsche, the family’s company owns stakes in automotive start-ups such as Israeli vehicle software developer Aurora Labs and the Californian laser-based sensor company Aeva.
On Tuesday, the investment vehicle, whose preference shares are listed, said its net result after tax in the first six months reached €2.1bn compared with last year’s €2.3bn. It attributed the drop to the woes of Volkswagen, which has been grappling with software issues, low demand for its electric vehicles and a falling market share in the world’s largest car market, China.
Net debt, however, dropped by €700mn to €5bn since December 2023 largely thanks to dividends from VW worth €1.4bn and €300mn from Porsche.
Porsche SE said €783mn of the dividend income had been passed on to its shareholders. More than half of the company’s preference shares are held by institutional investors, while voting shares are exclusively held by members of the Porsche and Piëch families.
Read the full article here
