German luxury automaker Porsche announced Friday it will divest its ownership stake in high-end sports car manufacturer Bugatti as part of efforts to concentrate on its primary operations following significant financial setbacks.
The Stuttgart-based company will transfer its 45% holding in Bugatti Rimac — a partnership established in 2021 that controls French luxury brand Bugatti and holds a 20.6% interest in Croatian electric vehicle company Rimac — to an investment group headed by HOF Capital, a U.S.-based fund.
This strategic shift occurs as Porsche reevaluates its business approach after experiencing a devastating 93% decline in operating profits during the previous year, intensifying challenges for the German manufacturer that is majority-controlled by Volkswagen.
While the financial details of the transaction remain confidential, sources familiar with the agreement indicated that Bugatti Rimac carries a valuation exceeding $1 billion. Both Porsche and Bugatti Rimac representatives declined to provide commentary on the pricing.
“In setting up the joint venture Bugatti Rimac together with Rimac Group, we successfully laid the foundation for Bugatti’s future,” Leiters said in the companies’ joint statement.
“Now, with the sale of our stake, we are focusing Porsche on the core business.”
The luxury automaker faces mounting pressure to reduce expenses and generate additional capital as its performance has severely impacted parent company Volkswagen. Profit margins collapsed to just 1.1% in the past year, down dramatically from 14.1% in 2024, hurt by U.S. trade tariffs and declining sales in the Chinese market.
Leiters, who assumed the chief executive position at the start of this year, now confronts the challenge of implementing cost-cutting measures and capital optimization strategies.
When the original partnership was formed, former CEO Oliver Blume characterized it as merging Bugatti’s ultra-luxury vehicle manufacturing capabilities with Rimac’s technological expertise in electric transportation solutions.
Rimac had previously indicated in November that discussions were underway with Porsche regarding potential changes to their joint venture arrangement.
BlueFive Capital, which oversees $15 billion in managed assets, confirmed Friday its participation in the HOF Capital-led consortium, though it specified its investment targets only Bugatti Rimac operations, excluding Rimac’s independent activities.
The investment firm, established in November 2024 and headquartered in Abu Dhabi’s financial district, maintains offices throughout the Gulf region as well as London and Beijing, providing private equity, real estate, infrastructure and financial services.
Once the transaction concludes, Rimac Group will assume control of Bugatti Rimac and establish strategic partnerships with both BlueFive Capital and HOF Capital to facilitate future expansion, according to BlueFive Capital’s announcement.
