German carmaker Porsche is interested in acquiring a majority stake in a battery company

On August 17, Porsche AG of Germany announced its intention to acquire a majority stake in the subsidiary of German company VARTA AG that manufactures automotive power batteries. If this acquisition plan is successful, Porsche will become the new shareholder of this battery production company in financial crisis after debt restructuring. However, this plan still needs to be approved by antitrust agencies of relevant countries.

Porsche released a statement on the 17th saying that it plans to invest 30 million euros, including acquiring a majority stake in V4Drive, a battery company affiliated to VARTA AG, through capital increase. It is reported that a new hybrid model launched by Porsche uses the high-capacity lithium-ion battery pack produced by V4Drive. Through this equity investment, Porsche will be able to more directly participate in the research and development, production and sales process of V4Drive batteries to ensure the stability and reliability of battery supply.

On the same day, VARTA AG announced that it had reached an agreement with creditors on the preliminary plan for the company's debt restructuring. It plans to introduce an investment company affiliated to Porsche as a new shareholder to hold a controlling stake in VARTA together with MT Investment Company, the current major shareholder of VARTA. It is expected that this will significantly reduce the company's debt, inject fresh liquidity and ensure that VARTA has sufficient funds for production by the end of 2027. MT Investment Company and Porsche will hold 32% of VARTA's shares respectively.

VARTA AG is headquartered in Ellwangen, a city in southwest Germany. It produces batteries for automobiles, industry and consumer goods. The new hybrid model 911 Carrera GTS launched by Porsche uses the high-capacity lithium-ion battery pack produced by VARTA. Due to high debt, VARTA AG applied to the court in July this year to enter financial restructuring procedures to avoid bankruptcy. The company's business is distributed in more than 100 countries and regions, and its global annual sales exceed 800 million euros.

In the first half of this year, Porsche's global sales volume was 155,900 vehicles, a year-on-year decrease of 7%. The sales profit was only 3.06 billion euros, a year-on-year decrease of 20.5%. Facing the decline in sales volume and dismal performance, Porsche took the initiative to lower its full-year performance expectations and announced that it would abandon the goal of electric vehicle sales accounting for 80% by 2030.