The tail keeps wagging the dog over in Germany, as low-volume Porsche is again looking to bump its stake in high-volume Volkswagen. This time, Porsche's supervisory board authorized increasing its stake to 31%, an action which would require the luxury sports maker to make a bid for VW itself. Porsche expects the mandatory bid (any stake increase over 30% requires a full bid) for VW will cost $134 a share.

The proposed combo would be formed as a holding company and converted to a European stock corporation with 12 supervisory board members headquartered in Stuttgart. Increased competition from Japanese, Malaysian, and Chinese automakers was cited by Porsche as a main reason to increase its share of VW. We're sure Porsche doesn't mind the windfall profits they've had since 2005, when they began investing in Volkswagen, either. This is huge news in Europe, where VW has long been at the top of the food chain, and we're getting the feeling that we'll be reading more industry stories like this in general as time progresses.

[Source: Market Watch]

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