VW Will Rule Porsche

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In the ongoing saga of who will buy out which car company, it looks like VW is going all in and plans to fully acquire corporate sibling and long time corporate rival Porsche. And by ” fully acquire” I mean that Volkswagen is planning to take full ownership of Porsche.

This is all according to Der Spiegel, the respected German news magazine, who said that VW is amending earlier plans to acquire only 50 percent of the German sports car maker and now want it all.

Der Spiegel says the sale will be done in two phases: Phase one is for VW to get 49.9 percent of Porsche, which was VeeWee’s initial plan from a few months back, and then phase two is for VW to buy the remaining shares outright. For Porsche’s end of the deal, they’ll get approximately 8 billion Euros to help counter their massive debts. In the end the Porsche family will end up being a 50 percent owner in a joint VW-Porsche company. By the time all of this is over, VW will make Porsche the tenth brand in the VW family.

This looks to be the final chapter in a long running series of takeover and counter-takeover bids from both companies. The main protagonists in all this have been of course, family members: Ferdinand Porsche’s Grandsons Wolfgang Porsche and Ferdinand Piech. It all came to a head within recent weeks when it was reported that Porsche CEO Wendelin Wiedeking was to be replaced.

The Porsche CEO has come under fire recently since under his leadership, Porsche’s debts increased. Why has Porsche found themselves with all this red ink? Because they themselves tried to takeover VW. Porsche had obtained nearly 51 percent of VW stock and had options for another 20 percent. Combine those leveraged moves with the global economic downturn, and there goes Porsche.

On the upside, this does keep Porsche in German hands, as well as a known management quantity in VW. Better that then a bunch of investors from some random country with money, goes the thinking, since it was rumored that Porsche would sell part of their stake to the Qatar Investment Authority.

Source: TheGarageBlog

Photo from Flickr user Fabio Aro

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