Following years of negotiations, Volkswagen has finally announced its buyout of Porsche. The remaining 50.1 percent stake in Porsche will cost Volkswagen €4.46 billion, completing a takeover bid that began in earnest in 2009 when VW acquired 49.9 percent of the sports car manufacturer for €3.9 billion.

The move comes after the manufacturers decided to wrap up the process in order to avoid a tax bill of up to €1.5 billion, which would have been applied to the sale if it had taken place in 2014. However, nothing between these two companies is ever straight-forward. So while Porsche has become a wholly owned Volkswagen company, Volkswagen will make payment to Porsche SE, a holding company that not only owns the Porsche sports car business, but also has a 32.2 percent stake in Volkswagen AG.

“The accelerated implementation of the shared goal will make Porsche SE a financially strong holding company with attractive potential for increasing value added. We are creating clearly defined, sustainable structures and a solid outlook for Porsche SE’s future,” said Porsche board member Matthias Mueller.

“We can now cooperate even more closely and jointly leverage new growth opportunities in the high-margin premium segment,” VW Chief Executive Officer Martin Winterkorn said in a statement.

Volkswagen and Porsche announced that they do not expect their merger to be accomplished within the period they originally established. In late 2009, VW acquired a 49.9% stake in Porsche for €3.9 billion and initiated an integration plan that would be completed before the end of 2011.

However, discussions between VW’s Board of Management and Porsche Automobile Holding SE led both parties to the same conclusion due to legal hurdles that cannot be overcome until the end of the year. Nevertheless, they both stated that they remain committed to the original plan of integrating Porsche into the arms of the VW Group, with the sports car maker retaining its independence as well as its Zuffenhausen headquarters.

VW announced that in the coming weeks its Board of Management will examine other courses of action in order to achieve the original goal, and present its findings to the Supervisory Board before the end of the year.

via CarScoop

So you thought the Volkswagen / Porsche merger was a done deal over a year ago? Well, so did we, but the Wolfsburg-based VW Group is facing tax and legal problems in its planned merger with Porsche, much of it due to Porsche Holding SE’s – the Porsche brand’s parent company – heavy debt burden. Porsche SE will need a large cash infusion before being healthy enough for a proper merger.

Volkswagen AG currently owns 49.9 percent of Porsche cars while Porsche SE owns the remaining 50.1 percent. “Volkswagen remains totally committed to the Comprehensive Agreement and to the merger with Porsche. However, the tax and legal hurdles still to be overcome on the way are not insubstantial,” said Volkswagen AG CEO Martin Winterkorn on Thursday. Winterkorn is also CEO of Porsche SE.

Getting control of Porsche and maximising synergies between the two automakers is essential to VW meeting its goal of being the world’s largest automaker by 2018 and selling more than 10 million units a year. Porsche is a successful brand with large profit margins and the two companies have already planned many projects as a part of a €700 million investment per year in shared synergies. Winterkorn says that the planned infusion of €5 billion for the first half of 2011 into Porsche SE is proceeding on schedule.

Adapted from WorldCarFans

VW CEO Martin Winterkorn is wasting no time in coming up with huge plans for the Porsche brand. VW and Porsche recently announced a deal in which the two automakers would merge into a single, massive automotive business.

First off, Winterkorn wants to raise Porsche’s volume, and raise it by a lot. Porsche sold about 100 000 units in its last fiscal year but stands to see a drop in the current one due to the economic crisis that has hit premium automakers pretty hard. Winterkorn has said that he wants the Porsche brand to be doling out 150 000 units a year by 2013.

And where would all those extra sales come from? It would definitely have to be from lower-priced, more mass appealing products and VW plans to add three new models to the Porsche lineup in order to do that.

It is too early for any detailed sketches of what models Porsche would build. But VW has spoken on what kind of products Porsche should bring to the marketplace.

One would be a vehicle slated below Porsche’s current entry-level model the Boxster. A second could be a “baby brother” to the Cayenne, or a Porsche variant on the VW Tiguan. Although, VW has promised it would not water-down the Porsche name with too much Volkswagen content. These would be models that remain true to the promise of the brand. Such a model may already be in development by Porsche and Audi, although the brands have denied up to now that any such vehicle was in the works.

Lastly, there would be a variation on the new Panamera. Hard to imagine what that would look like, except to speculate that Porsche may want to field a less expensive sedan onto the market to compete more directly against BMW and Mercedes-Benz.

Source: WorldCarFans