ELLWANGEN/STUTTGART (dpa-AFX) - The sports car manufacturer Porsche AG wants to buy the electric car battery business of the ailing battery group Varta. The two companies are currently in negotiations about a possible majority investment in the Varta subsidiary V4Drive, Varta announced in Ellwangen last night. The companies have already signed a non-binding letter of intent. Initially, the Varta subsidiary is to be outsourced, then the Volkswagen Group subsidiary Porsche would participate by increasing its capital. The Varta share price rose sharply.

Varta did not provide any financial details. According to Varta, whether the deal will go ahead depends on various factors, including a thorough examination of the books by Porsche. Nevertheless, investors in the former Borsen star regained a little more confidence: the share price rose by a good 32 percent to 11.76 euros after the start of trading on Friday. Most recently, the share price was still up by around a quarter. Porsche preference shares gained 0.4 percent.

For Varta shareholders who have been invested for some time, the strong price increase is little consolation. At the beginning of 2021, the shares were worth over 181 euros at their record high before gradually losing value and then plummeting significantly in the fall of 2022. In May of this year, the company was kicked out of the small-cap index SDax on the stock exchange. Varta was unable to present the audited annual financial report from the previous year on time due to a hacker attack.

Varta is in serious trouble. The once buzzing business with rechargeable lithium-ion button cells for the then booming wireless headphones, among other things, suffered a severe setback due to cautious consumers and competition from Asia. The business with wallboxes for storing electricity for charging electric cars, among other things, also failed to gain momentum.

The Group is currently having its existing restructuring report updated (IDW S6 report). This is to examine the possibilities for a fundamental restructuring and the resulting financing measures.

The electric car battery under the name V4Drive was actually intended to open up new business opportunities for Varta in the field of electromobility. There had long been speculation that Porsche would be a first customer for Varta's battery cells.

DZ Bank analyst Holger Schmidt wrote that the V4Drive technology was still in the development stage and would require an investment in the low three-digit million euro range in order to achieve the necessary major advantages. However, Varta could not afford this at present due to the tight financial situation. The V4Drive cell should then go into series production next year. The expert believes that the deal is likely to go through, although Varta's creditors will have to agree. After all, a transaction would put money in the coffers, which could be used for the necessary restructuring of Varta.

The sports car manufacturer Porsche wants to set up its own battery cell production with partners anyway. According to earlier statements, the Zuffenhausen-based company is planning to set up a production facility with an annual cell capacity of 10 to 20 gigawatt hours in the coming years. This would be enough for up to around 200,000 cars with a battery capacity of 100 kilowatt hours. Porsche sold around 320,000 cars in 2023, but the majority are still combustion cars.

Investments of 2 to 3 billion euros are needed for 20 gigawatt hours, it was said. Porsche wants to find partners for this. It is not yet clear where such cell production would take place. Porsche also wants to work together with the parent company Volkswagen's battery company PowerCo./men/nas/mis