Report: Volkswagen Plans to Buy Porsche agreed upon

July 18, 2009

Germany (ChattahBox) — The German weekly news magazine Der Spiegel reported on its Web site Saturday that Wolfsburg-based Volkswagen AG is set to finalize an agreement in a few days where they will initially take a 49.9 percent portion of Stuttgart-based Porsche AG and later take the remaining shares. Porsche will then become one of 10 Volkswagen brands, according to the magazine. It’s another twist between these two neighboring companies who have vied for ownership of each other for some time. Family owned Porsche actually owns 51 percent of Volkswagen, but is drowning in debt, totaling about $12.7 billion, which it developed in previous attempts to overtake VW. As part of this proposed deal Porsche, VW and their bankers are nearing, Qatar would also take a stake in Porsche as well as acquire its options on VW stock. In the takeover Volkswagen would pay €8 billion ($11.3 billion), for Porsche in two stages. The first would give VW 49.9%, with the rest coming at a later date.
There is also a family soap opera aspect to this deal, where Chief Executive Wendelin Wiedeking will no longer oversee Porsche’s strategy and daily operations, but would retain his CEO title at Porsche’s holding company, as part of the deal. The departure of Mr. Wiedeking would be a victory of sorts for Ferdinand Piëch, Volkswagen’s autocratic supervisory board chairman, over his cousin Wolfgang Porsche, his counterpart at the luxury sports car maker.

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