After several snags, fits, stops and starts, and even a temporary fear by executives the deal might not get done, German automaker Volkswagen is all set to close the deal to acquire Porsche.

On one hand, the deal may sound incongruous to the average consumer and car buyer. VW, which literally translates to "the people's car," buying one of the most prestigious and exclusive brands in the world. But, in reality, the managements and ownership of the two companies have been entwined for decades since the end of World War Two.

Perhaps one of the most ironic twists in the deal that will finally bring Porsche under the Volkswagen AG umbrella, is that it comes after the much smaller Porsche had tried in 2008 and 2009 to acquire the much larger Volkswagen. Porsche's former CEO, Wendelin Wiedeking, considered almost the Lee Iacocca of the European auto industry, tried to engineer the deal through a complex and shady web of financial maneuvers and investments that came completely unglued and almost bankrupted Porsche.

The failure of the deal completely ruined what had been an 18-year, storied career for Wiedeking.

Indeed, after Porsche attempted the hostile takeover of VW, it was Volkswagen that came to Porsche's rescue. The deal has been delayed while the companies and the lawyers have been trying to sort out who will be on the hook for a number of shareholder lawsuits should they get decided in the favor of the plaintiffs.

The deal that is being solidified today, which will result in VW's full ownership of Porsche on August 1, was actually begun in 2009.

The connections between VW and Porsche have been many.

The connections between VW and Porsche have been many. Let's start with the fact that VW supervisory board chairman Ferdinand Piech is also part of the Porsche-Piech clan that holds a controlling stake in Porsche AG. The two companies have done business and collaborated on vehicles for decades. The current Volkswagen Touareg and Porsche Cayenne, for example, were engineered by Porsche and share a chassis. Going back in even further, of course, Ferdinand Porsche designed the original Volkswagen Beetle for the Nazi Party in 1930s Germany – the car on which the present day Volkswagen AG was literally built after the war.

How will the deal work and what does it mean? Because Volkswagen already owns part of Porsche, the deal will be classified as a restructuring to avoid 1.5 billion euros in taxes that usually follow a merger or acquisition. It's good to have the clout of Piech and Porsche in German politics. After all, we are pretty sure Germany could use the money, what with the country bailing out Greece and all.

VW will pay Porsche shareholders $5.61 billion for the 50.1 percent it does not already own.

VW will pay Porsche shareholders $5.61 billion for the 50.1 percent it does not already own. Then companies will continue to build cars together, finding engineering efficiencies like the one created around the Cayenne and Touareg.

And it's not as if VW doesn't know how to manage luxury brands. It also owns Bentley, Audi, Lamborghini and Bugatti. Indeed, Porsche's influence will be seen in future Bentleys and Audis for sure, though the brands will remain fiercely independent.

The deal is seen as a big positive for both companies by investors, who drove VW and Porsche shares higher on Thursday.


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  • 89 Comments
      • 2 Years Ago
      [blocked]
      cypherxx666xx
      • 2 Years Ago
      hey guys this is about porsche, the best sportscar maker in the world and as long as they produce models like the superb new 911, the stunning new Boxster or the upcoming supadupa 960, they can introduce new mainstream models as long as they want.
      vt8919
      • 2 Years Ago
      Did someone intentionally spend the time to park a Volkswagen in front of a Porsche just to get a picture that's related to the subject, or was it merely a happy accident?
      Alexander Kapka
      • 2 Years Ago
      I was under the impression that the attempted "acquisition" of VW by Porsche in 2008/2009 resulted in Porsche cornering the market, and netting the company anywhere from $8-15 billion for Porsche, instead of nearly bankrupting them. I could be wrong, but I thought the Porsche-VW short squeeze was kind of a big deal in that no one had successfully cornered a market in decades.
      Custom Street Rides
      • 2 Years Ago
      So now VW owns a good portion of the Luxury and non-luxury car companies who's bases are in Europe and distribute to parts of the world. Glad that we still have certain companies in the world who can still do good and smart business in these rough times, (no offense to other companies). Hope to see both VW and Porsche do well in the future.
      Christian L.
      • 2 Years Ago
      Instead of VW can we change the title to VAG or Volkswagen Audi Group because people think it's just Volkswagen
      tom.tommarello
      • 2 Years Ago
      Well this is news to me. I was under the impression VW already owned Porsche for decades. I have told so many people that and all along I was, sort of wrong. Are we sure this is not some rehashed news feed from the 80's? .....Thanks for the update. And now to go ponder my new found ignorance and embarrassment.
        evannever
        • 2 Years Ago
        @tom.tommarello
        I think it's been a fairly cozy relationship with some technology sharing along the way. Don't be too hard on yourself.
      Stinkyboy
      • 2 Years Ago
      oh well. just when I can afford a Porsche, I'm stuck with a VW.
      ECU tuner
      • 2 Years Ago
      Who gives a lying f*ck? Porsche and VW are still behind the Japanese in, well, EVERYTHING!!!! Reliability, interior quality, build quality, fun factor, steering feel, handling, performance, maintainance cost, price, those are just a few things which the Japanese competitors have over both VW and Porshce, two of some of the crappiest brands ever. Plus, Japnese cars just have a certain feel to the that is apparent once you drive one, it echoes their mater engineering and world-class craftsmanship. As opposed to the utter pieces of SH*T that all German automakers like Porshche and VW amke.
        Scotch Bingington
        • 2 Years Ago
        @ECU tuner
        Oh also, the car performs absolutely amazingly without having to tune the ECU. See, german engineers actually know how to get the best combo of performance and reliability out of their engines.
        Carlos Cruz
        • 2 Years Ago
        @ECU tuner
        Have you ever sat inside of a German vehicle before? Reliability- Debatable, I'll give you that so that you'll feel better Interior quality- This is what sets a VW from a Japanese. Germans take pride in fit & finish. Sit in a GTI/Golf R then sit in a Evo, WRX, Civic S. Even the most expensive Japanese car in this class has crappy interiors, while the GTI/Golf R have Audi-like interiors. In the luxury market its the same deal. The insides of all Japanse cars make you feel like the car you're in was built by Mattel. Build quality- See above, same rule applies Fun factor/Driving enjoyment- This is what BMW specializes in (seen an M series?) and part of the reason why they are the world's most valuable brand (as of Spring '12) Steering feel, handling- See above, but overall all of the Germans can do this better than any other. Quattro? Performance- M (BMW), S (Audi), AMG (MB), R (VW).... need I say more? Maintenance cost- Some can be more complex or expensive than others, but thankfully all German vehicles are designed to have Synthetic oils, therefore the maintenance is only performed at 10k. When divided up it equals to roughly the same amount. You may say that most German vehicles require 91 oct gas, but the extra $3-5 at the pump are well worth it. Price- Most of these vehicles are competitively priced against the Japanese vehicles. Koreans are starting to undercut, and America's makes need to keep their stock moving so its also at a lower price. However we can both agree that neither of us would buy either one.
        crshcrstr
        • 2 Years Ago
        @ECU tuner
        this guy has clearly never even sat in a german car...
          Sox05
          • 2 Years Ago
          @crshcrstr
          No he hasn't because he can't afford one.
          Schadenfreude
          • 2 Years Ago
          @crshcrstr
          Ah hiprocracy, thou art a heartless bitch...
        derekwilkinson
        • 2 Years Ago
        @ECU tuner
        Umm... what? Please tell me which German cars you have owned. I would like to know. Have you even DRIVEN a 911? The new interior on the 991 is beautiful.
          Sox05
          • 2 Years Ago
          @derekwilkinson
          Him driving a 911? LMAO! These trolls cant even afford a a Jetta let alone a 911? HA!
        k_m94
        • 2 Years Ago
        @ECU tuner
        Are you... Fried_Rice, columbianricer, Captain Obvious etc? There were a lot more names I think, but this troll keeps getting banned and reappearing every now and then saying the same ****. Or has the scummy, torrid crap pool at the bottom of the internet churned out its own duplicate? Commence calling me a troll, or UAW worker, or German car wh*re or paid off by VW, MB, BMW in 3, 2, 1...
          evannever
          • 2 Years Ago
          @k_m94
          He was also forcedInductionfan. He tries so hard, but his rabid fanboyism simply makes him irrelevant. It is more akin to watching a side show act than actually engaging in discourse.
        k_m94
        • 2 Years Ago
        @ECU tuner
        I hate trolls/ blatant fanboys like you as much as the next honest commenter on Autoblog, but it does liven up the comment section with some completely irrelevent uneducated defecation that gets torn up immediately by a tirade of downvotes and riddled with the bullet holes of stinging replies.
        Gorgenapper
        • 2 Years Ago
        @ECU tuner
        You should go back to troll class, master-level trolls are not so blatantly obvious.
        nomadsto
        • 2 Years Ago
        @ECU tuner
        trolly molly!
        Logan
        • 2 Years Ago
        @ECU tuner
        is this guy brain dead?
        Sox05
        • 2 Years Ago
        @ECU tuner
        You MAD brah?
      Schadenfreude
      • 2 Years Ago
      Gotta love VW. Their reliability is coming back strong, and they sure know how to manage car brands. I love my GTI
        ECU tuner
        • 2 Years Ago
        @Schadenfreude
        How much does VW pay you to make these POS coments?
          John Galvin
          • 2 Years Ago
          @ECU tuner
          "None. No affiliations with any automotive company." With earlier claims that Japanese cars drive better than even the 911 you are obviously lying to cover up your even more obvious Japanese funded trolling and continue to accuse others of being paid by the Germans. Deny all you want but we know you are being paid in recalled Toyota accelerator pedals.
          Schadenfreude
          • 2 Years Ago
          @ECU tuner
          How much does Kia pay you to make this POS comments?
          ECU tuner
          • 2 Years Ago
          @ECU tuner
          None. No affiliations with any automotive company. On the other hand you are almost definitely a VW employee, looking at your comments. No one else would ever defend such a crappy car.
          guyverfanboy
          • 2 Years Ago
          @ECU tuner
          How much does Toyota pay you to troll Autoblog?
          Darryl Arthur
          • 2 Years Ago
          @ECU tuner
          How much do you pay your mother to live in her POS basement?
      Myself
      • 2 Years Ago
      Just the mere fact that VAG owns Porsche is devaluates the Porsche brand. Yes, VAG bought Lambo and Bugatti, but those were mere brands, had no cars worth mentioning or no cars at all when VAG stepped in. Same with downmarket Skoda and Seat, carmakers on the brink of going bust. Yes, they're all a success, because they're like VAG cars - sterile and heavy on parts sharing - so sorry, there's nothing more exclusive on Gallardo than in it is on a Skoda Fabia. Porsche is different and I fear they will be diluted to just another VAG brand....
      eeliezerp
      • 2 Years Ago
      japanese car are made better and drive better than german cars what is this guy smoking try driving a german car heck drive a vw the most affordable german car because if you drive a bmw audi or porshe they are in a different world japannese cant copete
        breakfastburrito
        • 2 Years Ago
        @eeliezerp
        German cars have their strong suits; however, saying Japanese cars "can't compete" is nonsensical. I own an Rx7 and Mx5 from Mazda, and both are very competitive with German cars at the track. It really comes down to the driver.
        Schadenfreude
        • 2 Years Ago
        @eeliezerp
        Must be smoking something REALLY strong
        trevor-k
        • 2 Years Ago
        @eeliezerp
        Japanese cars have f"n garbage interior's, cheap plastic, crappy leather, and garbage aesthetics have ALWAYS been a common theme with japanese interiors.
        k_m94
        • 2 Years Ago
        @eeliezerp
        Sorry, downvoted you because I swore you were saying the opposite. Try using punctuation, and you know, sentences. Not a grammar nazi, but just because it's easier to type doesnt mean it's easy to read.
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