Porsche and VW agree merger
By Daniel Schäfer in Frankfurt
Published: May 6 2009 19:22 | Last updated: May 7 2009 00:04
Volkswagen and Porsche announced plans to merge on Wednesday in a move that would relieve the sports carmaker from its debt burden and bring the 3½-year takeover saga surrounding Europe’s largest carmaker to an end.
After a meeting of the Porsche family owners and VW and Porsche executives in Salzburg, the family clan agreed to create an “integrated car-manufacturing group” with 10 marques united under one roof.
The move would in effect set Porsche aside from the nine existing brands of the VW group and bring the sports carmaker’s hopes of a domination of Europe’s largest carmaker to an end.
“The independence of all brands and explicitly also of Porsche shall be ensured,” Porsche said in a statement.
People close to the situation said the plan to create a new holding company would be preceded by a capital increase of up to €4.5bn ($5.9bn) at the stock market-listed Porsche holding.
Porsche said a task force of Porsche and VW managers, works council representatives from both companies and the state of Lower Saxony aimed to devise final details of the company structure in the next four weeks.
Lower Saxony owns just over 20 per cent in VW and has the right to block crucial decisions such as a merger.
Wednesday’s agreement closed a family schism that had opened between Wolfgang Porsche, chairman of the eponymous carmaker, and Ferdinand Piëch, chairman at VW, in recent weeks.
The headstrong family managers had clashed over how to bail out Porsche, which is ailing under a €9bn debt load from its stake-building at VW.
Mr Porsche had rebuffed an idea by Mr Piëch for VW to take over Porsche AG, the automotive business that is owned by the indebted holding company.
Porsche has used a contentious options strategy and spent about €23bn to gain control of a nearly 51 per cent stake in VW. It had initially aimed to increase that stake to more than 75 per cent to control the carmaker through a domination agreement.
The new car group could aim to attract outside investors. People close to the situation said several sovereign wealth investors from the Middle East, one from Qatar, had expressed interest in investing in a combined VW/Porsche group.
