Porsche has bought Varta AG out of the battery division V4Drive. The deal means that the battery group's debt will be written down by billions of kroner.
Porsche has acquired battery manufacturer Varta AG from financially challenged battery company V4Drive. The deal means that Varta AG's debt will shrink by billions.
The partners announced this in a press release .
But the agreement also means that V4Drive will now change its name to V4Smart, and that Porsche will now own most of the battery company. Varta AG will only retain a small part of the company, which is however insignificant in the day-to-day operations.
The reason for Porsche's acquisition is to be found in Varta's financial problems. The company, a significant player in consumer batteries, is under such financial pressure that a reconstruction has been necessary.
Varta had to make agreements with creditors to reduce its debt. As a consequence, its share price fell significantly.
Billions of dollars in debt were forcibly written down last year
An attempt to establish a parallel business with batteries for Porsche's hybrid cars, among others, was also not successful. Therefore, it has now been officially sold.
Although the deal actually came about last year. Read more about it here .
Porsche is currently using the V4Drive battery technology in its 911 GTS model. So, in order not to lose a crucial supplier, the Zuffenhausen people devised a rescue plan.
– We look forward to working with our new team and strengthening our innovation, says Reimold, the car brand's production manager, in a press release.
A bankruptcy for Varta's battery division would have had serious consequences for Porsche's production of hybrid cars. Perhaps so serious that the GTS model, which is a hybrid, had to be discontinued altogether.
In August 2024, Porsche and Varta's main shareholders reached an agreement on a rescue plan. With a loan of 100 million euros, the car brand was guaranteed financial stability until 2027.
As part of the agreement, smaller shareholders lose their investments, and creditors had to accept that their billion-dollar claims against Varta will shrink by 60 percent.
As recently as August 2024, Varta had a debt of almost 500 million euros.
Today it is worth just over 200 million euros, or the equivalent of one and a half billion Danish kroner.
