- Mar 11, 2008
Porsche denies plan to raise stake in VW to 75%
After Porsche moved to increase its ownership in Volkswagen to 51 percent last week, an overzealous German magazine took it one step further over the weekend by reporting that Porsche was going for an even larger piece of the pie... a whopping 75 percent. Porsche pulled in the reigns and quickly released a statement today denying the action, pointing out that such a move, "...overlooks the realities in VW's shareholder structure." For now, there is apparently no truth to the published reports that Porsche is going to continue gobbling up Volkswagen.
Maybe so, but analysts have pointed out in the past that the most economically advantageous position for Porsche is if it can get its hands on Volkwagen's multiple sources of income through a so-called "domination and profit transfer" agreement. Such an agreement usually requires owning - what do you know? - a 75 percent stake in a company. Interesting.
The enthusiast-oriented Porsche has said it needed ownership in Volkswagen to prevent the automaker from falling into unfriendly hands (roughly 30 with some serious veto power, has the power to block any maneuver that jeopardizes the 82,000 VW jobs in its state. Stay tuned, this isn't the end of it.
[Source: International Herald Tribune]