Autoblog

Porsche, VW finally say "I Do"

Jonathon Ramsey — Wed, 01 Aug 2012 17:29:00 EST

Filed under: Performance, Porsche, Volkswagen, Earnings/Financials, Luxury

If you weren't paying close attention, you probably missed the climax of the Volkswagen and Porsche union. After three years of trying to plan the perfect wedding - and by "perfect" we mean one in which VW didn't have to pay $1.9 billion in tax on the transaction - and two years in which Porsche inadvertently played Bridezilla, the consummation has resulted in matter-of-fact announcements and a jargon-filled press release from VW.

So now that Porsche belongs 100-percent to VW, what does it mean? For the moment, not much that outsiders will be able to see. The eagerness to tie the knot has been about unlocking the cost savings of the unified firm, said to be €700 million ($856M U.S.), and clearing out Porsche's debt burden of something like €2.5 billion ($3.1B U.S.). The two companies already work together on models like the Panamera and Macan, and have a platform-sharing future already mapped. Filing the final paperwork means they can continue their collaboration even more closely and without regulators peering over shoulders.

Comprehensive integration will, naturally, be ongoing, but from now on, it's "'Til death do us part" or whatever that is in German. Have a read of the presser below for some number-heavy details.

Continue reading Porsche, VW finally say "I Do"

Porsche, VW finally say "I Do" originally appeared on Autoblog on Wed, 01 Aug 2012 17:29:00 EST. Please see our terms for use of feeds.

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Porsche finds way around $1.9B tax bill tied to VW deal

Jonathon Ramsey — Wed, 13 Jun 2012 14:31:00 EST

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

After five months of finessing the deal, Volkswagen and Porsche Holding SE have figured out how to sidestep the tax man: VW's €4.5 billion purchase of the remaining 50.1-percent stake in Porsche's sports car unit was going to mean a tax liability of €1.5 billion ($1.9B U.S.) due to the Baden-Württemberg Finance Ministry. Volkswagen was going to be on the hook for that, and the amount threatened to scuttle the deal.

Previously, the two companies planned to create a holding company to control the remaining share until 2014, at which time it could be transferred to VW without paying a tax. Beyond the two-year wait just to close the deal, that plan also meant that VW couldn't fully integrate Porsche into its operations and so be forced to deal with Porsche for two years at an inefficient, arm's-length distance.

Th new plan, still awaiting final approval from the state authorities, is simple. The Porsche Holding SE empire, which isn't small, owns Dr. Ing. h.c. F. Porsche AG, the unit that makes the sports cars. If VW purchases the unit outright from the holding company, the purchase is taxed. Instead, VW plans to give Porsche Holding SE the €4.5 billion purchase price as well as one voting share of VW stock. By 'giving' Porsche Holding a stake in VW, even if it is just one single share, it turns an outright purchase into a corporate restructuring. A tax-free corporate restructuring, specifically. What's German for "Voilà!"?

According to a story in Reuters, Porsche Holding has been given legally binding notice from the state that is will not need to pay any taxes on such a transaction. VW said it's still looking at its options for ingesting the 50.1-percent stake, but it looks like the end of that deal just got a lot closer. Now about that $2.6 billion investor lawsuit...

Porsche finds way around $1.9B tax bill tied to VW deal originally appeared on Autoblog on Wed, 13 Jun 2012 14:31:00 EST. Please see our terms for use of feeds.

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Volkswagen says it could conclude takeover of Porsche this year

Jonathon Ramsey — Wed, 25 Jan 2012 18:01:00 EST

Filed under: Porsche, Volkswagen, Earnings/Financials

It's been a whole three weeks since we checked in with Volkswagen's takeoever of Porsche, and the most recent news wasn't so good: investors filed a $2.6 billion suit against Porsche over the Stuttgart maker's attempt to gobble up VW. Those same investors also filed an arbitration application against Volkswagen. That hasn't stopped a VW executive from saying that its ownership of Porsche could finally be concluded this year, according to a report in Der Spiegel.

VW had earlier predicted the deal would be done last year, then released a statement in September saying that that too many hurdles and unknowns remained concerning investigations and economic ramfications for the deal to get done in 2011. The hurdles centered around previous lawsuits, including one brought by American investors in 2010, and the fact that VW couldn't evaluate Porsche appropriately until they were settled.

However, the latest upbeat report on overcoming the obstructions to getting a deal done this year don't mention those lawsuits. Instead, the resolved issues are a one-billion-euro tax payment that VW can avoid by creating a holding company by 2014 to control the Porsche stake, and VW's agreeing to contractually assure Porsche retains control over its models and where it spends its money. According to that unnamed executive, this opens the door for VW to sponge up the final 50.1 percent of Porsche it doesn't own, for a price of €3.9 billion - about $5.1B USD - but we have no idea how or why the lawsuits aren't mentioned as a factor.

In the meantime, Reuters reports that VW and Porsche are working "at arm's length" even though they have the same CEO and CFO and are busy developing cars together, a fact which is testing CEO Martin Winterkorn's patience. Earlier this month, Winterkorn was quoted as saying he wants to bring the companies closer "without needing to have a lawyer stand next to a Porsche employee every time he screws something into a Volkswagen or vice-versa."

Volkswagen says it could conclude takeover of Porsche this year originally appeared on Autoblog on Wed, 25 Jan 2012 18:01:00 EST. Please see our terms for use of feeds.

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Investment groups file $2.6B suit against Porsche over VW takeover bid

Chris Shunk — Tue, 03 Jan 2012 17:44:00 EST

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

The Volkswagen takeover of Porsche may look like a slam-dunk, but a group of investment funds is hoping to change that. Bloomberg reports that the investment group has filed a lawsuit in Stuttgart, Germany, seeking $2.6 billion in damages. The group's issue traces back several years earlier to when Porsche attempted to take over the infinitely larger VW.

The group said in a statement that Porsche "gained control over the price of VW common stock as it secretly built enormous derivative positions covering almost all of VW's freely traded shares, then triggered a massive short squeeze, and finally released billions of euros worth of shares into the short squeeze for its own profit."

The group's version of the VW takeover story is similar to the one we heard about in a 2010 lawsuit, but Porsche apparently denies the accusations. Porsche spokesperson Frank Gaube has reportedly said the automaker will need to receive the suit before it could be closely examined. Bloomberg says that the investment group has also filed an arbitration application against VW.

Investment groups file $2.6B suit against Porsche over VW takeover bid originally appeared on Autoblog on Tue, 03 Jan 2012 17:44:00 EST. Please see our terms for use of feeds.

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Report: Porsche facing suit over 'stranglehold' on VW shares

Chris Shunk — Wed, 27 Oct 2010 08:00:00 EST

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

Porsche spent billions in an effort to purchase as many Volkswagen shares as possible from 2006 to 2008. But eventually the luxury sports car maker's debt became so overwhelming that it was Volkswagen that ended up in position to snap up it's fellow German automaker. On the surface, that's the end of the story, but Viking Global Investors claims that the tale is a lot more complicated. Business Week reports that the New York-based investment company is suing Porsche for misleading investors to "believe that the VW shares were overvalued, inducing them to enter into short sales of VW shares." The fund lost $390 million in just two days, and short-sellers around the world reportedly lost $38 billion in the same time span.

Nearly $400 million is a lot of money, but it's only one of the short seller suits filed against Porsche. Back in January, several short sellers filed suit with similar claims, as the U.S.-based investors lost over $1 billion on VW short sales.

We aren't at all knowledgeable about the rules of short sales and we don't have any lawyers on the staff, but we can tell you that, at the very least, these lawsuits are likely a big-time hassle for Porsche. And if these suits ultimately bear fruit for the plaintiffs, Porsche could be a very costly problem for a car maker already short on cash.

[Source: Business Week]

Report: Porsche facing suit over 'stranglehold' on VW shares originally appeared on Autoblog on Wed, 27 Oct 2010 08:00:00 EST. Please see our terms for use of feeds.

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Volkswagen takes 49.9 percent stake in Porsche AG

Jonathon Ramsey — Tue, 08 Dec 2009 09:32:00 EST

Filed under: Porsche, Volkswagen

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]

Continue reading Volkswagen takes 49.9 percent stake in Porsche AG

Volkswagen takes 49.9 percent stake in Porsche AG originally appeared on Autoblog on Tue, 08 Dec 2009 09:32:00 EST. Please see our terms for use of feeds.

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Porsche and VW expected to keep NA operations independent?

Noah Joseph — Mon, 17 Aug 2009 16:40:00 EST

Filed under: Porsche, Volkswagen

The German auto industry is in for a big shakeup with the news that Porsche will be merging with the Volkswagen group. But while Wolfsburg and Stuttgart prepare for mutual integration, on this side of the Atlantic, business is expected to carry on as usual.

According to the latest report from Automotive News, Porsche Cars North America will continue to report back to Porsche HQ in Germany, as opposed to re-routing the chain of command to go through Volkswagen of America. In this way, Porsche's North American distribution and sales and service networks will continue to operate much as they have, and in the same way which the Volkswagen Group already operates its other premium divisions, with Audi of America reporting back to Ingolstadt, Lamborghini back to Sant'Agata and Bentley back to Crewe. The takeaway? Don't expect to see 911s selling down at your local VW dealership any time soon.

[Source: Automotive News - subs. req'd | Image: Torsten Silz/AFP/Getty]

Porsche and VW expected to keep NA operations independent? originally appeared on Autoblog on Mon, 17 Aug 2009 16:40:00 EST. Please see our terms for use of feeds.

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VW-Porsche cross-pollination as Winterkorn, Pötsch join Porsche board

Sam Abuelsamid — Thu, 13 Aug 2009 18:59:00 EST

Filed under: Hirings/Firings/Layoffs, Porsche, Volkswagen

The assimilation of Porsche into the Volkswagen Group continued today as two top executives from Wolfsburg have taken up similar positions at the parent company of the sports car maker. Volkswagen CEO Dr. Martin Winterkorn will become CEO of Porsche Automobil Holding SE on September 15. He will be joined on the Porsche SE board of management by Hans Dieter Pötsch, who will serve as chief financial officer. Porsche SE is the holding company owned by the Porsche and Piech families that controls Porsche AG, the automaker.

Conversely, Michael Macht, who recently replaced Wendelin Wiedeking as CEO of Porsche AG, will be appointed to a senior management position at Volkswagen where he will represent the interests of Porsche. Macht will also retain his role at Porsche AG. Hit the jump for the official press release.

[Source: Porsche]

Continue reading VW-Porsche cross-pollination as Winterkorn, Pötsch join Porsche board

VW-Porsche cross-pollination as Winterkorn, Pötsch join Porsche board originally appeared on Autoblog on Thu, 13 Aug 2009 18:59:00 EST. Please see our terms for use of feeds.

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REPORT: Porsche denies word that CEO Wiedeking will hand over the keys amidst deal talk

Jonathon Ramsey — Thu, 16 Jul 2009 14:29:00 EST

Filed under: Porsche, Volkswagen

This executive cycle isn't uncommon, especially in Germany: CEO displays great leadership over time, then decides to do something daring, then gets caught in a series of unfortunate events, then gets a tarnished reputation, then departs the formerly high-flying company (see also: "Schrempp" and "Pischetsrieder"). Porsche CEO Wendelin Wiedeking is hoping to avoid that last phase, and his company has been fighting back rumors that his departure is imminent.

With Porsche swimming in debt, Volkswagen allegedly making extortionate claims, and Porsche considering selling 49% of its car business to Wolfsburg, several German business papers are reporting that Wiedeking is eying the exit. Automotive News reports that a writer at the Financial Times Deutschland went so far as to report that the CEO had hired attorneys to advise him. The scenarios presented in case of an exit suggest that an interim CEO will take over until a successor is named.

The head of Porsche's labor union, though, said that the reports aren't true, and Wiedeking "is doing his job and will continue to do his job." What's more, he said that the Porsche and Piech families have not agreed to join the companies, that no decision will be made without discussions with Porsche's supervisory board, and that the 49% share that VW might take in Porsche is worth double the amount being offered. As with so many family sagas, this one is a long way from being over.

[Source: Automotive News, sub req'd | Image: Alexander Hassenstein/Getty]

REPORT: Porsche denies word that CEO Wiedeking will hand over the keys amidst deal talk originally appeared on Autoblog on Thu, 16 Jul 2009 14:29:00 EST. Please see our terms for use of feeds.

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REPORT: German union leader calls on Porsche CEO to end ego trip, merge with VW

Jonathon Ramsey — Fri, 10 Jul 2009 18:29:00 EST

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

Volkswagen labor union chief Bernd Osterloh has called out Porsche's CEO for holding up a merger between the two German automakers: "Together, one could do a whole lot of more things if [Wendelin] Wiedeking would end his ego trip." Osterloh believes Wiedeking is standing in the way of a tie-up with VW, and his repeated thrusts and parries are only making things difficult for both companies.

Osterloh further accused the Porsche head of being "part of the problem and not part of the solution," claiming that he has "absolutely no more trust in the current board of Porsche." Although Porsche and VW may benefit from coming closer together, it is also clear that Porsche needs VW more than the other way around. Should the two bickering automakers eventually manage to come to terms, however, the powerful union leader has one last barb to throw: "Wiedeking isn't running our company, and he never will."

[Source: Bloomberg | Image: David Hecker/Getty]

REPORT: German union leader calls on Porsche CEO to end ego trip, merge with VW originally appeared on Autoblog on Fri, 10 Jul 2009 18:29:00 EST. Please see our terms for use of feeds.

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