• Dec 8, 2009
Cue Ennio Morricone and the symphonic accompaniment to the endgame: VW has officially taken a 49.9% stake in Porsche. VW paid €3.9 billion ($5.75B U.S.) for its cut, "based on the enterprise value for Porsche AG calculated under a careful due diligence and valuation procedure." That's a few shades more than the €3.3 billion amount VW was saying it would pay a few months ago.
In acquiring Porsche, VW not only gains a premium brand that is still among the most profitable in the business, but VW expects its operating profit to jump by €700 million ($1.03B U.S.) over time due to cost-saving synergies. The purchase won't be finalized until 2011, though, when VW will incorporate Porsche Holding Salzburg, Europe's largest car dealer which also happens to be owned by Porsche.

You can read VW's press release – which has an air of something from Napoleon's PR department after the Battle of Austerlitz – after the jump.

[Source: Volkswagen]

PRESS RELEASE:

Volkswagen takes 49.9 percent stake in Porsche AG
Further milestone reached on the way towards the integrated automotive group with Porsche

Wolfsburg, 07 December 2009 - Volkswagen Aktiengesellschaft has today taken a 49.9 percent stake in Porsche AG. The next important step on the way towards the integrated automotive group with Porsche has therefore been completed, as announced, before the end of the year. The price for the stake is €3.9 billion and is based on the enterprise value for Porsche AG calculated under a careful due diligence and valuation procedure.

Following the Comprehensive Agreement concluded in August, the implementation agreements signed in November and the Volkswagen Extraordinary General Meeting held last week, the stake in Porsche AG represents the next milestone on the way towards the integrated automotive group with Porsche under the leadership of Volkswagen. The acquisition of the trading business of Porsche Holding Salzburg is planned for 2011. The creation of the integrated automotive group is then to conclude with the merger of Volkswagen AG and Porsche SE during the course of the same year.

The combination of the two companies follows a compelling strategic, industrial and financial logic. For the Volkswagen Group, Porsche ideally complements the brand portfolio. The Stuttgart-based car maker will allow Volkswagen to further expand its position in the premium business, which offers particularly strong earnings. In turn, as an independent brand under the roof of the Volkswagen Group, Porsche will have the potential for significant additional growth.

The transaction will have a sustained positive effect on the earnings situation of the Volkswagen Group. With a return on sales of 10.3 percent, Porsche AG is the world's most profitable automobile manufacturer. Volkswagen will in future participate in this business success through its stake. In addition, the planned integration of Porsche in the Volkswagen Group and the associated closer cooperation will realize significant synergies on both the income and the cost side. As a result, the annual operating profit of the Volkswagen Group is expected to increase by some €700 million in the long term.


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    • 1 Second Ago
  • 21 Comments
      • 5 Years Ago
      As far as I know, Porsche Holding PEOPLE still OWNS VW, they have the majority shares in VW. So they are just buying themself. I know it's confusing for people to grasp, but there's nothing dramatic in this :) It's still in reality Porsche that owns VW.
        • 5 Years Ago
        Porsche has a little over 50% of votes, they own 22.5% of vw. There's more to vw than just their stock value.
        • 5 Years Ago
        The reason VW is buying Porche is because all of Porche's value lies in their holdings of Volkswagen group. Porche's bold takeover attempt was contingent on maintaining the massive revenues from their vehicle sales to keep them afloat. The carpocalypse threw a wrench in their plans. Unless I'm mistaken, Porche is virtually insolvent at this point. That's what happens when you're value is inflated in hard assets with limited liquidity. VW is buying shares of Porche in order to infuse cash into the company, and are essentially buying themselves back and taking over Porche at the same time (partially using revenues from Porche's takeover attempt no less).

        To keep the Napoleon metaphor going: If Porche is Napoleon & the battle of Austerlitz was their takeover last year, today's events are them getting spanked on their way back from Moscow. Game. Set. Match.
      • 4 Years Ago
      Models that can run on ethanol-based E85, for instance, are allowed mileage calculations based on the small fraction — 15 percent — of regular gas that's used when running on E85. That means E85-compatible SUVs like the Chevrolet Suburban or Dodge Durango could register gas mileage similar to an economy car. Mileage figures are averaged across a range of engines and transmissions per vehicle, too, so a particularly high- or low-mileage trim level could skew the numbers for an entire carline. Heavy-duty models, like the Ford F-Series Super Duty and Chevrolet Silverado HD, are exempt from the calculations.
      http://www.automotivecraze.com
      • 5 Years Ago
      Most of you, as well as I, on this blog cannot even afford a Porsche, so cut the crap about brand dilution. All I see is VW, as they did with Audi, Lambo and Bentley, etc...will be a good thing for us people in the bottom of the scale. The technology and possible platform sharing may bring a more affordable Porsche/Audi. After all, VW/Porsche was one company back in the Ferdinand days, don't tell me Porsche didn't have VW parts back in the day. I know there are interchangeable parts between the two brands for certain older models.
        • 5 Years Ago
        Speak for yourself about not being able to afford a Porsche. And that parts sharing back in the day....That was back in the day, not now. Some people (who can afford one) like to have a sports car that isn't plagued with pathetic reliability. And don't start on bringing a modern day 914. Look where that car ended up as. Sorry performance for a Porsche even back then, and the really good 914s are so heavily modified they're not really 914s anymore.
      • 5 Years Ago
      Can be that bad...

      Can it?
      • 5 Years Ago
      Were they too cheap to fork over the cash for the other 0.1%? lol
      • 5 Years Ago
      Pretty amazing how the tables turned on Porsche. They bought a majority stake in VW couple years ago and now they are selling. I know they made a killing on hedgefunds who tried to short VW stock and got caught out (VW stock went from 210 euros to more than 1,000 euros in two days) but not sure why they now are selling VW back and then selling majority interest of Porsche?

      LouisJ @ http://www.providagroup.com
      • 5 Years Ago
      As a long time Porsche fan and former owner (hope to be again) this saddens me. Porsche will soon become just another brand in the VW supermarket.
        • 5 Years Ago
        i'm not sure of that , if anything Porsche will be better. the same guys are in control as before, except that Porsche has more resources now. can't wait to see the Panamera GTS, Panamera convertible and maybe the coupe version. hopefully the road legal RS Spyder was more than just a rumour.
      • 5 Years Ago
      "VW expects its operating profit to jump by €700 million ($1.03B U.S.) over time due to cost-saving synergies. "

      Anyone else think that sounds ominous? I just hope all the cost savings happens under the skin, in the electrical bits, HVAC.
        • 5 Years Ago
        @StickShift: Don't worry, Porsche has done parts sharing for a while now, and nobody has noticed it before.

        @Spark (down below): If you're hoping a Panamera GTS is going to be anything like the Cayenne GTS, there's no difference between a GTS and an S.
        • 5 Years Ago
        zamafir, Bentley and Lambo where in terrible shape when VW got them, they could only go up. Porsche is at the top of their game.
        • 5 Years Ago
        sounds ominous? I'm sorry but do any of you have any sort of qualified intel on how vw ran bentley, or lamborghini into the ground. Last I checked both are doing better than they've ever done before, Lamborgini even realizing Lamborgini's dream of a more reliable alternative to ferrari. The fact is, VW does brand management and platform sharing better than any automaker on earth.
        • 5 Years Ago
        @Throwback - you're serious? VAG deserves no credit for where they are today? alright man, pass me that crack pipe when you're done with it. I take it Rolls had no where to go but up when BMW bought them as did aston? No credit all around, luxury brands are easy and fun!

        @StickShift - understood, my apologies, though it may be more than hidden bits, look at how VAG as synergized parts and development with Lamborghini and Bentley to get an idea. Honestly, posche could do with higher quality bits inside and I don't think there's any plausible room to argue we'll see cost cutting with porsche. Even in this current climate. I see good things ahead, especially for the non porsche brands within the fold.
      • 5 Years Ago
      That's a license to destroy Porsche from a quality perspective. Take it from a guy who has owned an Audi and still owns a VW, and never does a day go by without cursing their "over engineers"
      • 5 Years Ago
      Wow! Just not long ago Porsche was going to buy half of VW.
      Hopefully the platform sharing will not dilute the Porsche brand.
        • 5 Years Ago
        put any porsche build in the last decade next to any VAG car build in the last ....

        the building quality is exactly the same.
        i mean, take a look @ the sheet metal, light units, gaps between the sheet metal.
        the gaps between a lightunit and sheet metal.

        i think porsche makes a design and engineers the engines, but the chassis/body final rendering is done @ vag.

        or maby VAG tools engineers.

        i don't know, but it looks like it made by the same hands.

        they have been been involved for a very a long time.
        the beetle, the 914, the 924, the classic monster RS2(witch still is among the fastest accelerating car on the world), etc, etc...

      • 5 Years Ago
      About Damn Time. All I want is a modern RS2. Audi's already got an entertaining blown '5, porsche, just do your magic and maybe put it in the a4 avant or a5 sportback. Then, and only then, may you get to work on audi's other models.
      • 5 Years Ago
      Sad day.
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