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The new Porsche 911 Carrera 4S is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland, March 5, 2019. REUTERS/Pierre Albouy

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LONDON, Sept 6 (Reuters Breakingviews) – It’s a hairy time for any carmaker to go public. Share prices are crumbling as Russia threatens to cut off gas to Europe. Despite good arguments not to, Volkswagen (VOWG_p.DE) announced on Monday its intention to list luxury brand Porsche, estimated at between 60 billion euros and 85 billion euros by analysts.

The timing has been made trickier by VW’s governance tangles. In July Chief Executive Herbert Diess was replaced by Porsche CEO Oliver Blume, at the behest of VW’s biggest shareholder, the Porsche and Piëch families. The risk is his status as CEO of both VW and Porsche creates conflicts. Blume can recuse himself from any votes with unresolved conflicts, but that still looks messy.

VW’s confidence in Porsche is deserved. It grew year-on-year revenue by 8.5% in the first half despite the crisis, and is far ahead in its transition to electric vehicles. Besides, excessively focusing on value may miss the point. The deal will allow the Porsche and Piëch clans, who have over half the voting rights in VW, to get more direct control of Porsche by snapping up just over 25% of its voting shares. Those will be issued at a skinny 7.5% premium to the non-voting ones in the IPO. That means even if the listing price disappoints, some shareholders will still get what they want. (By Neil Unmack)

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Editing by George Hay and Oliver Taslic

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