Autoblog

Porsche's takeover of VW facing delays?

Michael Harley — Tue, 07 Apr 2009 17:59:00 EST

Filed under: Europe, Porsche, Volkswagen, Earnings/Financials

With present economic conditions shrinking Porsche's available cash, the automaker may have to adjust or delay its plans to gain full control of Volkswagen. In January, Porsche raised its stake in Volkswagen to 50.76% gaining a majority stake. The Stuttgart-based automaker wants to purchase more of VW, but it stressed that economic conditions must support the move.

The economy isn't the only thing keeping the family-owned automaker from proceeding. Even though Porsche has the ownership it needs in VW, the German government isn't immediately changing its position on Volkswagen Law, allowing Lower Saxony to keep a blocking minority vote. Most experts think Porsche will simply wait out the economy and wait for the VW Law, already criticized by the European Commission, to be removed. Time appears to be on Porsche's side, for now.

[Source: Wall Street Journal]

Porsche's takeover of VW facing delays? originally appeared on Autoblog on Tue, 07 Apr 2009 17:59:00 EST. Please see our terms for use of feeds.

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EU grants Porsche permission to purchase VW

Jeremy Korzeniewski — Thu, 24 Jul 2008 10:28:00 EST

Filed under: Europe, Government/Legal, Porsche, Volkswagen, Earnings/Financials

Porsche is one step closer to its goal of purchasing Volkswagen. Back in April of last year, the German automaker passed the 30-percent mark, forcing it to make an outright offer for The Volkswagen Group in its entirety, which it did. Not too many VW shareholders sold their stake to Porsche, as the bid was for the bare minimum amount allowed by law. Still, the legal requirement had been met, allowing Porsche to continue gobbling up the automaker according to its own timetable. Earlier this year, the VeeDub board approved a request by Porsche to obtain 51-percent of the company for some $15.73 billion, which would give it a majority stake. Before the house that Ferdinand built could complete its acquisition, the European Commission required it to make one last purchase, which took place in June of this year. Finally, the EU has granted its permission for the buyout.

This story is likely far from over, as the German State of Lower Saxony still claims a 20-percent stake in Volkswagen, which gives it certain rights to block decisions made by VW's new parents. Still, it seems that its only a matter of time before VW and Porsche are united under a different Ferdinand... Piech that is, grandson to Mr. Porsche himself.

[Source: Reuters]

EU grants Porsche permission to purchase VW originally appeared on Autoblog on Thu, 24 Jul 2008 10:28:00 EST. Please see our terms for use of feeds.

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Porsche gobbles up more of VW while takeover is delayed

Jonathon Ramsey — Fri, 20 Jun 2008 08:59:00 EST

Filed under: Porsche, Volkswagen

A procedural glitch, as opposed to Berlin-based intrigue, has postponed Porsche's plan to take over Volkswagen. The EU Commission requires a company to have a controlling interest in a company, or at least an agreement for such, before it will consider a company's application for regulatory approval. To straighten things out, Porsche has raised its stake in VW from 30.6 percent to 35.5 percent, which effectively grants it control of the much larger carmaker.

There's still that issue of the Volkswagen Law and Lower Saxony's refusal to give up the fight for its minority-majority stake. Lower Saxony, the state that is home to VW and 150,000 workers who don't want to lose their jobs, just bought another 500,000 shares in VW to maintain its position.

The EU Commission, however, has already said that Lower Saxony cannot use the VW Law to maintain control. That makes Porsche the fox outside the henhouse, waiting on the inevitable moment when EU officers will come and unlock the doors. Even better for the sports car maker, because Porsche hedged the purchase of its VW stake with cash-settled derivatives, it is assumed to have only spent a "a fraction" of the published price for controlling interest.

[Source: Automotive News, sub req'd]

Porsche gobbles up more of VW while takeover is delayed originally appeared on Autoblog on Fri, 20 Jun 2008 08:59:00 EST. Please see our terms for use of feeds.

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European Union taking Germany to court over amended VW Law

Michael Harley — Fri, 06 Jun 2008 18:58:00 EST

Filed under: Europe, Government/Legal, Plants/Manufacturing, Porsche, Volkswagen, Roewe

In a move that may undermine Germany's protection of Lower Saxony and its close ties to Volkswagen, the European Commission plans to review the case of Volkswagen Law in the European Union's top court. As you may recall, Porsche has been trying to take majority control of rival Volkswagen. However, the so-called "Volkswagen Law" has protected VW from takeover by allowing the state of Lower Saxony (where thousands of VW jobs are at stake) to retain just enough stock in the company to prevent Porsche from capturing a majority vote. While the upcoming ruling may not only alter the ownership of Volkswagen, it also demonstrates the escalating authority that the European Commission has over once sovereign countries.

[Source: Automotive News Europe, subs. req'd]

European Union taking Germany to court over amended VW Law originally appeared on Autoblog on Fri, 06 Jun 2008 18:58:00 EST. Please see our terms for use of feeds.

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Germany approves new Volkswagen Law

Michael Harley — Wed, 28 May 2008 15:34:00 EST

Filed under: Europe, Plants/Manufacturing, Porsche, Volkswagen

Porsche didn't win... this round. The German cabinet approved amendments to the Volkswagen Law yesterday, but lawmakers left Porsche's key clause untouched. For those of you who haven't been following this saga, "Volkswagen Law" is the legislation that includes a provision to allow the federal state of Lower Saxony to keep a blocking minority vote in Volkswagen. That minority position is just 20 percent, exactly the amount currently held by Lower Saxony. With Porsche gobbling up shares in VW, intent on capturing a majority position so they can control plant closures, and Lower Saxony determined to protect thousands of jobs in their state... rest assured we haven't heard the last of this.

[Source: Automotive News]

Germany approves new Volkswagen Law originally appeared on Autoblog on Wed, 28 May 2008 15:34:00 EST. Please see our terms for use of feeds.

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Porsche stake in VW unlikely to change soon; a new "VW law" could return

Jonathon Ramsey — Tue, 29 Jan 2008 18:28:00 EST

Filed under: Etc., Europe, Porsche, Volkswagen

The so-called "VW law" was struck down by the European Court last October. Previous to that, the state of Lower Saxony was able to veto any Volkswagen shareholder action it didn't like. When the law was struck down it looked like the Lower Saxony had no choice but to watch Porsche, which had been circling shark-like around Volkswagen for a bit, decide on the day it chose to take majority control of the much larger company.

But Lower Saxony had a much bigger shark on its side in the form of the government in Berlin. Politicos in the German capital have been drafting a law that would "replace" the "Volkswagen law" and put Lower Saxony, with its 20.1-percent holding in VW, back in effective control of the company. The law still has hurdles to overcome, such as approval by the German parliament and then approval by the EU. Frankly, we don't see how the EU could approve the law if it artificially inflates the state's position over that of a shareholder. Porsche is going to wait for the law, and elections in Lower Saxony, to run their courses before proceeding with its efforts to take a majority stake. Der Saga continues.

[Source: Automotive News - Sub. Req.]

Porsche stake in VW unlikely to change soon; a new "VW law" could return originally appeared on Autoblog on Tue, 29 Jan 2008 18:28:00 EST. Please see our terms for use of feeds.

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Porsche tells VW: We won't eat you until after the holidays, Merry Christmas

Jonathon Ramsey — Wed, 28 Nov 2007 13:04:00 EST

Filed under: Etc., Europe, Porsche, Volkswagen

Porsche got what it wanted with the repeal of the "Volkswagen Law", but has done nothing yet but stand over its prey, waiting for... well, nobody knows what Porsche is waiting for. However, Porsche CEO Wendelin Wiedeking has told VW that the smaller company will not make Christmas dinner of the larger: Porsche will wait until after the holidays to take majority control of Volkswagen.

His exact words were "Christmas is the holiday of peace; let's create a little harmony." Yet there doesn't seem to be much of that going around. Porsche created a new board structure, and the board will have six seats. Porsche and VW workers thought that meant that each company got three seats each. VW, with 324,000 workers to Porsche's slightly-less-than 12,000, doesn't like that arrangement, so it's suing for more seats. Wiedeking clarified the board structure to say that either company could have as many seats as both sides could agree to -- but that he wouldn't go against Porsche employees' expectation of three.

So no one knows how the transaction will play out -- and to hear Wiedeking tell it, that includes him. "Even now," he said, "none of the players involved knows how many moves will still be required and how long it will take until the game is finally over." If this were a movie, he would then laugh maniacally, stroke the white cat in his lap, and hit the big red button on the console in front of him. But it's not. So, like everyone else, we'll just wait and see.

[Source: IHT]

Porsche tells VW: We won't eat you until after the holidays, Merry Christmas originally appeared on Autoblog on Wed, 28 Nov 2007 13:04:00 EST. Please see our terms for use of feeds.

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