Porsche board gives go-ahead for increase in VW stake to >50%
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03-03-2008 | 07:57 AM
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Porsche board gives go-ahead for increase in VW stake to >50%
POR3.GR Porsche board gives go-ahead for an increase in Volkswagen (VOW.GR) stake to above 50%
The supervisory body authorized the Managing Board to initiate all steps needed under regulatory and antitrust laws throughout the world. The reviews by the regulatory authorities are expected to take several months. As soon as the requisite clearances have been obtained, Porsche can acquire the majority of the shares in Volkswagen. Porsche already owns 30.6% of Volkswagen.
The supervisory body authorized the Managing Board to initiate all steps needed under regulatory and antitrust laws throughout the world. The reviews by the regulatory authorities are expected to take several months. As soon as the requisite clearances have been obtained, Porsche can acquire the majority of the shares in Volkswagen. Porsche already owns 30.6% of Volkswagen.
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03-03-2008 | 11:38 AM
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Porsche Board Backs Plan to Raise Volkswagen Stake (Update1)
2008-03-03 09:35 (New York)
(Adds Porsche CEO's comment in second paragraph.)
By Chad Thomas
March 3 (Bloomberg) -- Porsche SE, maker of the 911 sports car, said its board has given approval to raise the automaker's stake in Volkswagen AG to more than 50 percent as it seeks greater control over Europe's largest carmaker.
``Our aim is to create one of the strongest and most innovative automobile alliances in the world, which is able to measure up to the increased international competition,'' Porsche Chief Executive Officer Wendelin Wiedeking said in a statement today. Porsche said it has no plans to merge the two carmakers.
Porsche is already the biggest shareholder in Wolfsburg, Germany-based Volkswagen, with a 31 percent stake. Wiedeking, who says his carmaker holds options enabling it to increase its Volkswagen stake significantly, has said there will be ``no sacred cows'' at VW as he seeks to boost profitability and quality. Porsche topped J.D. Power & Associates' 2007 initial car-quality survey, while Volkswagen was fifth from the bottom.
Porsche last year made a low-ball bid for all of Volkswagen, which few shareholders accepted, which means the Stuttgart, Germany-based carmaker can now raise its stake without making the offer to all shareholders.
``The supervisory body authorized the managing board to initiate all steps needed under regulatory and antitrust laws throughout the world'' to increase the holding, Porsche said in today's statement.
Battle With Leaders
The sports-car maker is locked in a battle with Volkswagen's labor leaders over the allocation of worker seats on Porsche's board and legal protections of labor representatives' veto powers at Volkswagen.
Porsche opposes draft legislation in Germany's parliament that would maintain the rights of labor leaders and the state of Lower Saxony to block major decisions, such as factory closures, at Wolfsburg, Germany-based Volkswagen. Bernd Osterloh, the head of Volkswagen's works council, lashed out on Feb. 26 against Porsche, saying its approach is ``slowly turning into a hostile takeover.''
The draft law is in response to a ruling by Europe's highest court last October ordering Germany to either completely scrap the so-called Volkswagen Law, which governed corporate policy at the company, or come up with an alternative.
Porsche has questioned why Volkswagen needs any special protection.
The law's new version would drop a provision that limited shareholders' voting rights to match those of Lower Saxony, which holds about a 20 percent stake. Even so, the proposal would retain a ``blocking minority'' on major decisions for anyone with a 20 percent holding. That's less than the 25 percent investors in other German companies must hold to veto significant changes.
The draft law also keeps a provision requiring two-thirds of the supervisory board to sign off on decisions such as job cuts and factory closings. Worker representatives hold half the seats on the supervisory board, similar to a U.S. company's board of directors, meaning they can effectively block any such move.
2008-03-03 09:35 (New York)
(Adds Porsche CEO's comment in second paragraph.)
By Chad Thomas
March 3 (Bloomberg) -- Porsche SE, maker of the 911 sports car, said its board has given approval to raise the automaker's stake in Volkswagen AG to more than 50 percent as it seeks greater control over Europe's largest carmaker.
``Our aim is to create one of the strongest and most innovative automobile alliances in the world, which is able to measure up to the increased international competition,'' Porsche Chief Executive Officer Wendelin Wiedeking said in a statement today. Porsche said it has no plans to merge the two carmakers.
Porsche is already the biggest shareholder in Wolfsburg, Germany-based Volkswagen, with a 31 percent stake. Wiedeking, who says his carmaker holds options enabling it to increase its Volkswagen stake significantly, has said there will be ``no sacred cows'' at VW as he seeks to boost profitability and quality. Porsche topped J.D. Power & Associates' 2007 initial car-quality survey, while Volkswagen was fifth from the bottom.
Porsche last year made a low-ball bid for all of Volkswagen, which few shareholders accepted, which means the Stuttgart, Germany-based carmaker can now raise its stake without making the offer to all shareholders.
``The supervisory body authorized the managing board to initiate all steps needed under regulatory and antitrust laws throughout the world'' to increase the holding, Porsche said in today's statement.
Battle With Leaders
The sports-car maker is locked in a battle with Volkswagen's labor leaders over the allocation of worker seats on Porsche's board and legal protections of labor representatives' veto powers at Volkswagen.
Porsche opposes draft legislation in Germany's parliament that would maintain the rights of labor leaders and the state of Lower Saxony to block major decisions, such as factory closures, at Wolfsburg, Germany-based Volkswagen. Bernd Osterloh, the head of Volkswagen's works council, lashed out on Feb. 26 against Porsche, saying its approach is ``slowly turning into a hostile takeover.''
The draft law is in response to a ruling by Europe's highest court last October ordering Germany to either completely scrap the so-called Volkswagen Law, which governed corporate policy at the company, or come up with an alternative.
Porsche has questioned why Volkswagen needs any special protection.
The law's new version would drop a provision that limited shareholders' voting rights to match those of Lower Saxony, which holds about a 20 percent stake. Even so, the proposal would retain a ``blocking minority'' on major decisions for anyone with a 20 percent holding. That's less than the 25 percent investors in other German companies must hold to veto significant changes.
The draft law also keeps a provision requiring two-thirds of the supervisory board to sign off on decisions such as job cuts and factory closings. Worker representatives hold half the seats on the supervisory board, similar to a U.S. company's board of directors, meaning they can effectively block any such move.
