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Varta shares rise by 21%: Porsche shows interest in V4Drive

Published 07/05/2024, 08:08 PM
© Reuters.
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Investing.com - The sports car manufacturer Porsche (ETR:P911_p) (ETR:PSHG_p) could soon play a central role in the future of the battery company Varta (ETR:VAR1). The two companies are currently in negotiations about a possible majority stake by Porsche in Varta's subsidiary V4Drive. This division specializes in batteries for electric cars.

Already on Thursday night, Varta announced that a non-binding letter of intent had been signed. This agreement lays the foundation for the next steps: first, V4Drive will be transferred to V4Drive Battery GmbH. Following this, Porsche plans to participate through a capital increase.

So far, both companies have remained silent on the financial details. According to Varta, the conclusion of the deal depends on several factors, including a thorough examination of business documents by Porsche.

The news of Porsche's potential involvement triggered a noticeable reaction in the stock market: Varta's stock climbed more than 21% in Xetra trading to EUR 10.79. Until today's recovery, the loss since the beginning of the year was over 55%. This loss in value is due to the sluggish business of the company, which prompted Varta to commission an IDW-S6 report. This restructuring report aims to examine possibilities for a comprehensive restructuring and the resulting financing measures.

For Porsche, entering V4Drive could offer strategic advantages. Electric vehicles are a central component of the future plans of the Volkswagen (ETR:VOWG_p) Group, to which Porsche belongs. By participating in a specialized battery company, Porsche could further strengthen its position in the field of electromobility and secure a technological edge.

For Varta, on the other hand, the deal with Porsche could be a lifeline. The fresh capital and strategic partnership could help the ailing company successfully implement its restructuring plans and return to a growth path.

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