Porsche borrows 10 billion euros to buy VW
Porsche is not going to let up on its acquisition of VW. The Stuttgart maker of neun-ein-eins has tapped into a network of 37 lenders for a $13.7 billion loan to finance its purchase of VW shares. The money will go to pay for outstanding Volkswagen shares, since VW shareholders only offered up less than one-percent of their shares when Porsche offered them below-market-value sale prices. We aren't sure if anyone outside Porsche mandarins (most of them named "Piech") really knows why the company decided it wanted to swallow VW, but it's been theorized that it's in order to prevent hedge funds from taking over and breaking up the VW group. Earlier this year it was reported that of Porsche's 1.14 billion euro fiscal profit in the first fiscal half of '07, more than one billion of it came from VW. In which case it makes sense that Porsche would do whatever possible to keep the siblings together.
[Source: Detroit News]
Reader Comments (Page 1 of 1)
Avinash machado 10:42AM (7/12/2007)
So what happens to Lamborghini and Bugatti now?
Reply
Bart 10:56AM (7/12/2007)
A few months ago Porsche had no real interest in taking over VW, and purposely put out low bids on shares, as they were mandated to put out a bid on the company by a German law. The law says that if a company exceeds an X number of shares, it is obligated to put out that bid.
I'd really like to see something more official on this.
Reply
Friendly 11:07AM (7/12/2007)
Folks, there is no mystery -- just read the article. When Porsche crossed a certain threshold of ownership of VW, it was required by law to make an offer for the whole company. It made a lowball offer because it did not actually want to buy the whole company. It's all in the article (which is only three paragraphs long.) They have to buy the shares that were tendered to them, which amount to less than 1% of VW. This doesn't represent any new interest in taking over VW. What a misleading Autoblog headline and story!
"Porsche offered shareholders the lowest amount allowed under German law after its holding in Volkswagen, Europe's largest carmaker, breached the 30 percent threshold that forces a takeover offer."
Reply
Peter 11:08AM (7/12/2007)
This is very old news. When increasing their share over 30%, according to German law they were obligated to make an offer to the other shareholders. For this, they needed liquidity, hence the credit. However they deliberately lowballed the offer so nobody would take it. You make it sound like they're stepping up their efforts, which is nonsense.
Reply
Stéphane Dumas 11:23AM (7/12/2007)
there a French article about Porsche takeover of VW at
http://www.leblogauto.com/2007/07/porsche-sattaque-a-toyota.html and it mentions then it's the 1st step of the construction of their holding or "empire" to reply to Toyota.
Reply
xyx 11:30AM (7/12/2007)
hhmmm
nice sudi porche vw lamborghini bugatti LOLz
Reply
Bart 11:36AM (7/12/2007)
Just read that french article, and it's about something else entirely.
Reply
olddavid 11:53AM (7/12/2007)
Having owned one of Herr Doktor's machines, I have to ask myself why is it that they make money? Rust prone, requiring engine removal for most adjustments at prices even a Gates would blanch at, just where is the glamour? Call me biased, but having driven one of the under-steering bas*^%ds into an elm tree, in a corner I took faster twenty minutes earlier, just where is the charm and excitement in that? Maybe I am exposing my age, having found through painful experience that the Emperor truly is ass-naked.
Reply
Yago Bal 11:58AM (7/12/2007)
I don't see a problem with Bugatti or Lamborghini: neither brands have a single product overlapping Porsche.
The most expensive Porsche is cheaper than the cheapest Lambo.
The only problem is that will be a little more evident that Porsche isn't one of the ultimate sporting machines, but I don't see how that's a real problem...
Reply
nick 12:15PM (7/12/2007)
sources please? i can't find any other mention of this.
Reply
omar 12:26PM (7/12/2007)
This is good and bad in a way. VW is already such a large company, now with Porsche also, I hope that this does turn into the GM company of Europe.
Staying kind of small is very lucravtive and better for the well being of a auto company, the larger you get the harder it is to manage and then it declines.
Reply
Matt V 1:25PM (7/12/2007)
Solves those pesky Euro CO2 emission regulation problems as well.
Reply
Gerard 8:16PM (7/12/2007)
A German independent carmaker is trying to buy a majority stake in Germany's largest motor conglomerate?
Reply
Yago Bal 1:59AM (7/13/2007)
Little Mercedes also bought, digested and spited an American giant, remember?... O:)
It's not about size: it's about return...
MH 10:54AM (7/13/2007)
Little Mercedes?
Daimler is the 8th biggest company in the world according to Forbes' latest ranking. They're about a lot more than just Mercedes'.
Reply