German sports car manufacturer Porsche has signed an agreement to make a majority investment in Varta AG's large-format lithium-ion round cells business, as announced by the struggling battery maker on Wednesday.
The deal, initially revealed in August, will see Porsche obtain a majority stake in Varta's subsidiary, V4Drive Battery GmbH, through a capital increase at the unit.
This strategic partnership is expected to provide Varta with a “strong long-term partner” for the further development and marketing of its large-format lithium-ion round cells. The transaction is anticipated to close in the first quarter of 2025, pending merger control clearance and assessments of Varta's restructuring plan.
The announcement follows Varta's recent disclosure that its indirect majority shareholder, MT InvestCo, along with Porsche, has signed a contract to support the company amid its financial struggles.
Both MT InvestCo and Porsche will inject a total of EUR 60 million (USD 65.9 million) through a capital increase.
Varta plans to finalize its restructuring strategy in October 2024. To secure financing during this critical phase, the company has arranged a short-term bridge facility worth up to EUR 30 million with select lenders from its syndicated loan.
