Autoblog

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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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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More details leak out about Porsche's reported plan for entry level model

Jeremy Korzeniewski — Mon, 05 Oct 2009 17:31:00 EST

Filed under: Budget, Performance, Porsche, Volkswagen

Remember the Porsche 914? Most Porschophiles do, although some choose to forget the mid-engined sportscar built from 1969 through 1976. But the four-cylinder model was something of a sales success for the German automaker, handily outpacing the firm's range-topping 911 series throughout its model run. Might we see a return of the entry-level Porsche, once again with a little help from Volkswagen?

Coinciding with earlier reports, a story from Automobilwoche (via Drive), says the answer may very well be 'yes.' According to the German pub, Wolfgang Duerheimer, head of development at Porsche, has said that a model "significantly cheaper than" the Boxster is a top priority for the automaker. The new car would reportedly be produced in cooperation with Volkswagen, which recently assimilated Porsche into its giant European operations. Anyone else thinking BlueSport?

[Source: Automobilwoche via drive.com.au | Photo: Spurzem CC.2.0]

More details leak out about Porsche's reported plan for entry level model originally appeared on Autoblog on Mon, 05 Oct 2009 17:31:00 EST. Please see our terms for use of feeds.

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Did you think the VW-Porsche deal was done? Nein.

Jonathon Ramsey — Tue, 21 Jul 2009 10:59:00 EST

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

When Volkswagen and Porsche sat down at dinner to discuss which one was going to eat the other one, they forgot to invite the German tax man. After VW came to terms with Porsche to take a 49.9% stake in the Stuttgart sports car maker for €8 billion (around $11.4 billion U.S.), the parties discovered there would be a €3 billion ($4.26B) tax bill on top of that.

Adding €3B just to conclude the deal, the way it's currently structured, makes it untenable for both parties. Qatar is still in the picture, but until it's decided who would pay the tax and what they would get in return, some sources are saying the whole thing could evaporate. And if that happened, that could force Porsche to turn to one of several unsavory chapters titled "BK" in the commercial code. Neither VW nor Porsche has yet commented on the tax issue. Thanks for the tip, John!

[Source: News.com.au]

Did you think the VW-Porsche deal was done? Nein. originally appeared on Autoblog on Tue, 21 Jul 2009 10:59:00 EST. Please see our terms for use of feeds.

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Look Who's Talking Again: Porsche, VW resume negotiations

Jonathon Ramsey — Fri, 22 May 2009 08:26:00 EST

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

The way things read, Porsche might not have to get a merger deal done with Volkswagen, but it would appear to be in the carmaker's best interests if it does. The holdup seems to be Porsche - since VW still doesn't know what Porsche's financial situation is, talks broke down earlier this week. VW's labor leader, who has a seat on VW's board, has also said he doesn't want to speak to Porsche again until Porsche tells everyone what it really has in mind.

Now, though, the German corporate siblings have issued a joint statement saying, "Both companies will advance efforts toward this goal in a constructive way and in mutual agreement with all the parties concerned." Still, no one knows what that means other than a commitment to keep talking - which must count for something. In the meantime, Porsche is looking for another €1.75 billion in loans ($2.43B USD) to refinance its debt, and it is also due to receive a debt rating which could give a glimpse into what's really on the books.

[Source: Reuters]

Look Who's Talking Again: Porsche, VW resume negotiations originally appeared on Autoblog on Fri, 22 May 2009 08:26:00 EST. Please see our terms for use of feeds.

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Porsche backing off from taking majority stake in VW this year

Frank Filipponio — Wed, 26 Nov 2008 15:58:00 EST

Filed under: Porsche, Volkswagen, Earnings/Financials

Looks like Porsche won't be feasting on more shares of VW for Thanksgiving. Porsche has apparently decided to postpone its move to buy a majority stake in Volkswagen due to the global economic crisis. CEO Wendelin Wiedeking said he still wants that 75% share of VW, but that it's just too difficult at the moment. It doesn't help that VW shares are trading for "economically ridiculous" prices according to Porsche finance chief Holger Haerter. Porsche shares are trading at 57.261 euros, while VW was up 12.2 percent to 286.0 euros. Porsche told us last week in L.A. that it's vulnerable to the current slump in demand and that they expect 2009 to be a slow year. Controlling Volkswagen's movements and profits could help Porsche stay in the black over the next year, but it would simply be too risky right now.

[Source: Automotive News - Sub. Req.]

Porsche backing off from taking majority stake in VW this year originally appeared on Autoblog on Wed, 26 Nov 2008 15:58:00 EST. Please see our terms for use of feeds.

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REPORT: Porsche considering 914 revival

Noah Joseph — Thu, 11 Sep 2008 10:31:00 EST

Filed under: Convertible, Performance, Porsche, Volkswagen

Click above for a hi-res gallery of the Porsche 914

Once every 40 years or so, when the stars are aligned just right, there arises the cosmic possibility for Volkswagen and Porsche to collaborate on a small sportscar. The stars in question seem to be Porsche chairman Dr. Ferdinand Piech, a spirit of ~~takeover~~ cooperation between the two German automakers, and the input of third-party contractor Karmann. It was Dr. Piech, the same man who has been driving Porsche's takeover of the Volkswagen group, who had ushered the original Porsche 914 into reality. But when Volkswagen launches its latest concept at the LA Auto Show this November, it hopes the little Elise fighter will garner enough attention to put the project into production as soon as 2011 with versions for both VW and Porsche.

The original Porsche 914 was based largely on borrowed Volkswagen mechanicals. Karmann was also heavily involved in the 914 project, and could be tapped once again to build the new sportscar for both Volkswagen and Porsche, with the project potentially spawning an Audi R4, as well. Although some sources suggest the Porsche version could adopt the 2.7-liter flat six from the base Boxster, with Zuffenhausen admittedly considering the possibility of going back to four-cylinder engines, anything's possible. Sources point out, however, that the four-cylinder version of the 914 was the top selling model. While you consider the idea of a budget Porsche, check out the high-resolution images of original 914 images in the gallery below.

Gallery: Porsche 914

[Source: Motor Trend via PistonHeads]

REPORT: Porsche considering 914 revival originally appeared on Autoblog on Thu, 11 Sep 2008 10:31:00 EST. Please see our terms for use of feeds.

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European Court strikes down VW Law, Porsche takeover now possible

John Neff — Tue, 23 Oct 2007 12:26:00 EST

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

While Porsche has been gobbling up stake in Volkswagen for about a year, a little piece of legislation called the VW Law has been the only thing preventing the sports car builder from gobbling up the giant German automaker. Currently Porsche holds a 31% stake in VW, but with news today of the European Court striking down the VW Law, many expect the company to quickly increase its stake to a controlling 51%.

The VW Law itself dates back to 1960, and while a bit complicated to understand, basically stipulates that 80% shareholder approval is required to pass major decisions and regardless of how much stake a single entity holds, its voting block cannot be greater than 20%. Since the company's home state of Lower Saxony owns 20.1% of VW, it alone holds the power to influence the company's decision making. Under the VW Law, it has held the power to block any decision that would threaten its jobs and local economy. Thus, Porsche's desire to own a controlling stake in VW has been blocked by Lower Saxony as well as its inability to use the full force of its 31% stake in voting.

Porsche has been very patient so far, and will apparently remain so a little longer. It is not expected to increase its stake in VW before the end of the year, but everyone seems fully aware that today's historic news means that the company will sooner or be controlled by Porsche.

[Source: Automotive News, sub. req'd]

European Court strikes down VW Law, Porsche takeover now possible originally appeared on Autoblog on Tue, 23 Oct 2007 12:26:00 EST. Please see our terms for use of feeds.

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