Porsche will likely join Varta directly
Varta's Battery Manufacturer Crisis: Porsche Interested in Buying Varta's E-Auto Battery Business and Minority Stake
German battery manufacturer Varta has been in crisis for some time. Now, the struggling company plans to sell its E-Auto battery business. A potential buyer has already been identified. According to a report in the "Frankfurter Allgemeine Zeitung," Porsche is reportedly not only interested in acquiring a majority stake in Varta's V4Drive battery division but also a minority stake in Varta AG itself.
Porsche intends to raise capital for this minority stake. "With this minority stake, Porsche secures the spin-off process of the V4Drive production from the insolvent Varta Group," the report stated. Varta initially declined to comment.
It became known in early July that Porsche was ready to acquire a majority stake in V4Drive. A non-binding agreement had already been signed, but the entry of Porsche AG depended on various conditions, including a thorough review of the books, Varta announced at the time.
V4Drive was once seen as a major hope for Varta but turned out to be a burden. Due to a lack of orders, the company put the construction of a factory for large Lithium-Ion batteries on hold. Porsche had already ordered battery cells from Varta in 2021, but there were no reports of further orders.
Deal would be a "financial relief blow" for Varta
The Zuffenhausen-based company plans to establish its own battery cell production with partners in the coming years. Earlier reports indicated that the sports and off-road vehicle manufacturer intends to set up production in the order of 10 to 20 Gigawatt-hours cell capacity annually. This would theoretically be enough for 200,000 cars with a battery capacity of 100 Kilowatt-hours. Porsche sold around 320,000 cars in 2023, the majority of which are still combustion engines.
Should a deal eventually materialize, it would be a financial relief blow for Varta, according to Jürgen Molnar of RoboMarkets. Analyst William Mackie of Kepler Cheuvreux stated that Varta could free up capital and earn money through the sale. However, the company would still need to do more to get back on financial footing.
Porsche's potential acquisition of a minority stake in Varta AG could significantly boost the economy of Varta, as suggested by Jürgen Molnar of RoboMarkets. Moreover, should the deal between Porsche and Varta materialize, it might provide Varta with the necessary funds to invest in its planned battery cell production with partners, which could potentially help reduce its dependence on combustion engine vehicles.
