Porsche borrows 10 billion euros to buy VW

Porsche is not going to let up on its acquisition of VW. The Stuttgart maker of neun-ein-eins has tapped into a network of 37 lenders for a $13.7 billion loan to finance its purchase of VW shares. The money will go to pay for outstanding Volkswagen shares, since VW shareholders only offered up less than one-percent of their shares when Porsche offered them below-market-value sale prices. We aren't sure if anyone outside Porsche mandarins (most of them named "Piech") really knows why the company decided it wanted to swallow VW, but it's been theorized that it's in order to prevent hedge funds from taking over and breaking up the VW group. Earlier this year it was reported that of Porsche's 1.14 billion euro fiscal profit in the first fiscal half of '07, more than one billion of it came from VW. In which case it makes sense that Porsche would do whatever possible to keep the siblings together.

[Source: Detroit News]