Porsche and VW to Merge
#1
Porsche and VW to Merge
Reuters
Wednesday, May 06, 2009
FRANKFURT — Luxury car maker Porsche Automobil Holding SE slammed the brakes on attempts to take over Volkswagen AG and has instead agreed to explore a merger with Europe's biggest auto company.
The deal would represent a climb-down because Porsche is abandoning its goal of trying to dominate Volkswagen by building a 75 per cent stake. It now owns about 51 per cent of VW.
Details of the merger remain unclear, but Volkswagen and Porsche said on Wednesday they had agreed on a blueprint to create an “integrated car manufacturing group” within four weeks.
Under the new group, “10 brands shall stand below an integrative leading company,” Porsche said in a statement. Until now VW and Porsche have been run independently with separate management.
Volkswagen has been in charge of nine brands – Volkswagen, Lamborghini, Skoda, Bentley, Bugatti, Audi, Scania, Seat and Volkswagen Commercial Vehicles. Porsche has run the sports car brand independently.
The proposed merger follows a wave of consolidation in the auto industry, which has been hit by the global economic crisis. It has forced car groups Opel and Chrysler to seek new owners.
Porsche's existing shareholders would fund a capital increase of up to €5-billion euros ($6.7-billion U.S.) for the new company in 2009 or 2010, a person familiar with the matter said. Selling a stake to an outsider is not currently on the agenda, the person said.
The agreement to revamp Porsche's takeover follows a day of discussions among the families who control Porsche Automobil, the Piech and Porsche clans.
They had gathered in Salzburg, Austria, to discuss how to cut a €9-billion debt mountain built up by Porsche to fund its bid for VW.
On Wednesday, Porsche said that following discussions on forging closer ties between the two companies, it aims to “develop a corresponding basis for decision-making on the future structure of the common group.” Volkswagen welcomed the move.
The shape of a new company will be discussed by a VW-Porsche working group including the state of Lower Saxony – where VW is headquartered – as well as worker representatives.
Lower Saxony's premier Christian Wulff said he is ready to enter talks about the future of Volkswagen.
Wednesday, May 06, 2009
FRANKFURT — Luxury car maker Porsche Automobil Holding SE slammed the brakes on attempts to take over Volkswagen AG and has instead agreed to explore a merger with Europe's biggest auto company.
The deal would represent a climb-down because Porsche is abandoning its goal of trying to dominate Volkswagen by building a 75 per cent stake. It now owns about 51 per cent of VW.
Details of the merger remain unclear, but Volkswagen and Porsche said on Wednesday they had agreed on a blueprint to create an “integrated car manufacturing group” within four weeks.
Under the new group, “10 brands shall stand below an integrative leading company,” Porsche said in a statement. Until now VW and Porsche have been run independently with separate management.
Volkswagen has been in charge of nine brands – Volkswagen, Lamborghini, Skoda, Bentley, Bugatti, Audi, Scania, Seat and Volkswagen Commercial Vehicles. Porsche has run the sports car brand independently.
The proposed merger follows a wave of consolidation in the auto industry, which has been hit by the global economic crisis. It has forced car groups Opel and Chrysler to seek new owners.
Porsche's existing shareholders would fund a capital increase of up to €5-billion euros ($6.7-billion U.S.) for the new company in 2009 or 2010, a person familiar with the matter said. Selling a stake to an outsider is not currently on the agenda, the person said.
The agreement to revamp Porsche's takeover follows a day of discussions among the families who control Porsche Automobil, the Piech and Porsche clans.
They had gathered in Salzburg, Austria, to discuss how to cut a €9-billion debt mountain built up by Porsche to fund its bid for VW.
On Wednesday, Porsche said that following discussions on forging closer ties between the two companies, it aims to “develop a corresponding basis for decision-making on the future structure of the common group.” Volkswagen welcomed the move.
The shape of a new company will be discussed by a VW-Porsche working group including the state of Lower Saxony – where VW is headquartered – as well as worker representatives.
Lower Saxony's premier Christian Wulff said he is ready to enter talks about the future of Volkswagen.
#2
At least this model may preserve PAG's independence from direct interference by the other 9 brands. It may prolong Ferry Porsche's words - see it here: Small & Independent - '89 PCNA ad.
Last edited by adias; 05-06-2009 at 06:10 PM.
#3
I don't see how Ferry's vision of 'small & independent' can continue if this merger goes through.
Remember how the 914 took massive Porsche affectionado abuse because it used VW components. Well, it just might be replayed in in the near future.
We'll see . . . . . . . .
Remember how the 914 took massive Porsche affectionado abuse because it used VW components. Well, it just might be replayed in in the near future.
We'll see . . . . . . . .
#4
This merger of equals is better than the VAG acquiring outright PAG as was discussed last week.
#5
Let's not forget that Porsche Automobil still owns 51% of VW, so it really is a debt repayment at the expense of an asset swap. Ultimately you will get the Porsche family owners in control.
#6
Porsche has a vehicle that shares parts with VW, and the current vehicle makes about 1/3 of the total Porsche sales...the Cayenne has many inter changeble parts with the Touareg.
#7
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#8
let's hope it all comes good, so porsche can continue building cars we like
Well well,
it was not to be.
it was the intention that Porsche would own VW. i am unsure if i am glad or not with this turn-up in events.
i suppose that if the original deal was to be realised, Porsche could become just too arrogant. 'playing the financial market' was one of the reasons porsche could have afforded the intended takeover of VW.
as in many other businesses caught up in this GFC, it has been no different for Porsche with their huge loans on their 'market share options'
let's hope it all comes good, so porsche can continue building cars we like.
it was not to be.
it was the intention that Porsche would own VW. i am unsure if i am glad or not with this turn-up in events.
i suppose that if the original deal was to be realised, Porsche could become just too arrogant. 'playing the financial market' was one of the reasons porsche could have afforded the intended takeover of VW.
as in many other businesses caught up in this GFC, it has been no different for Porsche with their huge loans on their 'market share options'
let's hope it all comes good, so porsche can continue building cars we like.
#9
Thanks!
#10
Now imagine being an independent car company where the most CO2-ecological car already produces more than 150g, and the top of the range is way over 300g CO2. There is no way of having the 120g average in your product range by 2014. And if you don't you will have to pay big fines per extra gram of CO2 you are above the average they impose.
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