Porsche to take majority stake in VW for £7bnFri, 07 Mar 2008 00:00:00 -0800
By Ben Whitworth
07 March 2008 11:26
Porsche is about to become the majority shareholder in Volkswagen. The sportscar maker has been given the green light to purchase further stock in VW, taking its share past the 50 percent mark to give it a controlling interest.
As soon as various legal checks have been cleared, Porsche plans to purchase a further 20 percent of VW stock – it already owns 31 percent - at an estimated cost of around £7 billion.
The move - understood to be masterminded by VW chairman Ferdinand Piech – effectively protects both companies from any form of aggressive external takeover, with VW becoming a sub-group of Porsche. No merger between the two has been planned. However, rumours are flying that a future merger may happen should the EU try to enforce CO2 limits on car makers. Having VW, Skoda and Seat to balance out all those Cayennes wouldn't be a bad move. It might be the wisest £7 billion Porsche has ever spent.
The VW-Porsche tie-up was only made possible after a ruling last year. Europe's highest court abolished a law limiting shares in VW.
The state of Lower Saxony, the second largest VW shareholder said it had no plans to increase its 20 percent shareholding in the company. 'Our aim,' Porsche boss Wendelin Wiedeking told CAR 'is to create one of the strongest and most innovative automobile alliances in the world, which is able to measure up to the increased international competition.'
The tie-up comes hot on the heels of VW’s purchase of more than two-thirds of truckmaker Scania. Bundled together with the company’s controlling stake in MAN trucks, the VW-Porsche deal will make it Europe’s biggest car and truck maker.
By Ben Whitworth