Porsche has agreed to sell its stake in the venture that owns the Bugatti supercar brand to a consortium led by HOF Capital, the fund co-founded by a scion of Egypt’s billionaire Sawiris family.
Abu Dhabi-based private equity firm BlueFive Capital will come in as the largest investor in the consortium, which will also include a group of institutional investors across the US and EU, according to statements released Friday.
Since 2021, Bugatti has operated as a joint venture where Porsche held a 45% stake, and Croatia’s Rimac Group held 55%.
Under this transaction, Porsche will fully divest its equity stake in Bugatti Rimac and its 20.6% holding in Rimac Group.
Bloomberg News reported in December that HOF Capital, co-founded by Onsi Sawiris, son of billionaire Naguib Sawiris, and BlueFive Capital, run by former Investcorp executive Hazem Ben-Gacem, were in talks to acquire Porsche’s stake in Bugatti Rimac.
At the time, people familiar with the matter said the deal could be valued at more than €1 billion (R19 billion). Friday’s statements did not provide a valuation.
A spokesperson for Porsche, which is owned by Volkswagen, declined to comment.
Long seen as the epitome of engineering extravagance, Bugatti was once Volkswagen’s smallest brand, with annual sales of about 80 cars.
In 1998, it was revived under former Chairman Ferdinand Piëch after largely fading from existence in the 1950s.
Because of high development costs and low volumes, the 16-cylinder Veyron — Bugatti’s first model under VW control — was considered one of the biggest money losers in the auto industry.
Volkswagen decided to fold the Bugatti brand into a joint venture with its own sports-car brand, Porsche and Rimac five years ago. At the time, it extended a lifeline to Bugatti, a boutique French manufacturer.
VW parted ways with the brand largely due to insufficient synergies between the bespoke luxury carmaker and its high-volume business.
Porsche’s offloading of Bugatti is part of a broader push by Volkswagen’s Porsche and Piëch family owners to right-size the 911-maker’s asset portfolio as it grapples with lacklustre interest in luxury electric vehicles and technological and geopolitical upheavals across key markets.
VW, also under pressure to boost profitability and streamline the sprawling portfolio of operations, is simultaneously working on selling its engine and heat-pump maker Everllence.
VW has whittled down the candidates for the next round of bidding for Everllence, with the carmaker’s family owners showing interest in maintaining a stake in the unit via their listed holding company.
A consortium from buyout firm EQT AB that includes the family’s Porsche Automobil Holding is one of several candidates who have been shortlisted, Bloomberg News reported this week.
The latest Bugatti deal also spotlights how Middle Eastern investors, prolific dealmakers for years, have continued to deploy capital despite the disruptions caused by the Iran war.
Last week, Abu Dhabi’s Emirates International Investment Company took a minority stake in the Joe & the Juice chain at a valuation of $1.8 billion (R30 billion), while Axight bought into an Australian alternative asset manager at a $2.1 billion (R35 billion) valuation.
Earlier this month, a unit of royal Sheikh Tahnoon bin Zayed Al Nahyan’s conglomerate bought a majority stake in Richard Caring’s hospitality empire, which includes UK brands such as the Ivy restaurant chain.
Even before the US and Iran agreed to a ceasefire in early April, regional sovereign wealth funds from Saudi Arabia to Qatar were deploying billions in transactions.
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