Porsche AG, Croatia's Rimac set up JV involving VW's Bugatti brand

FRANKFURT, July 5 (Reuters) - Volkswagen's (VOWG_p.DE) luxury sportscar unit Porsche AG on Monday said it agreed to form a joint venture (JV) with Croatia's Rimac Automobili that will include VW's Bugatti brand, confirming plans mapped out earlier this year.

To be set up in the fourth quarter and based in Zagreb, the venture, called Bugatti-Rimac, will be 55%-owned by Rimac, with Porsche AG owning the rest.

Volkswagen will transfer Bugatti to the entity, Porsche said, adding Rimac CEO Mate Rimac will also lead the JV.

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Volkswagen Chief Executive Herbert Diess already said in March that Porsche would most likely form a JV with Rimac involving Bugatti and end up owning a minority stake. read more

"We are combining Bugatti's strong expertise in the hypercar business with Rimac's tremendous innovative strength in the highly promising field of electric mobility," Porsche AG CEO and Volkswagen board member Oliver Blume said.

Under the JV's roof two hypercar models will be produced: the Bugatti Chiron and the all-electric Rimac Nevera. All Bugatti models will continue to be produced at the brand's factory in Molsheim, France, Porsche said.

Porsche AG's Blume and the unit's finance chief Lutz Meschke will become members of the supervisory board of Bugatti-Rimac, which will have a total of about 430 employees in Zagreb and Molsheim.

Porsche AG earlier this year raised its direct stake in Rimac to 24% in a deal that valued the electric hypercar maker, which is currently assessing strategic options, at 795 million euros ($943 million). read more

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Reporting by Christoph Steitz

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