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GM Regains Full Control Of Opel

Posted on 02 December 2009 by Scott Hayes

General Motors Company has regained full control of its Opel brand after paying back 1.5 billion Euro in emergency loan, including interest. The move dissolves a trust that held a 65 percent stake in the European carmaker.

“The shares in Adam Opel GmbH were returned to GM,” the German economics ministry said in a statement on Monday.

GM lost majority control of Opel in June, when the German government agreed to provide the Detroit automaker with a 6-month emergency loan to Opel, hours before GM filed for a pre-packaged bankruptcy.

The main idea behind the trust was to monitor Opel’s liquidity and oversee the sale of a majority stake to a new investor. Earlier this month GM’s board of directors decided to keep Opel and restructure it, terminating plans to sell the brand to Magna International.

Via egmCarTech

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Tags: auto industry news, beetle convertible, convertible specialists, karmann, karmann ghia, karmann ghia coupe, karmann takeover, merger, takeover, volkswagen, volkswagen takeover karmann, vw, vw beetle

VW Completes Karmann Takeover

Posted on 25 November 2009 by Scott Hayes

Volkswagen AG has announced it will be establishing a new manufacturing unit located in VW’s home state of Lower Saxony, Germany. To make it happen VW have purchased the land, equipment, and machinery formerly owned by Karmann – the once iconic coachbuilder and convertible roof specialists who manufactured the classic Beetle-based Karmann Ghia coupe. Karmann has been in financial difficulty for a while, filing for bankruptcy protection back in April, and struggling since.

Production of a new vehicle at the plant is scheduled to begin in 2011. In the meantime, 200 new employees will be required to open the plant next year, and VW is estimating more than 1 000 new jobs will be created by 2014. Volkswagen AG has not disclosed which model will be built at the plant but early speculation is that a new Golf cabriolet may be in the works.

Via ClassicCar

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Tags: credit crunch, emirate of qatar, financial crisis, global economic crisis, golden handshake, lower saxony, michael macht, piech family, porsche, porsche ag, porsche family, porsche holding, severance package, takeover, volkswagen, vw-porsche company, wendelin wiedeking, wolfgang porsche, worlds largest car maker

Power Struggle Ends: VW To Acquire Porsche

Posted on 20 July 2009 by Scott Hayes

Volkswagen is planning to purchase all of sports carmaker Porsche, which has run into massive financial problems linked to its overly ambitious plan to take control of VW. The attempted takeover, which had been financed using loans, ultimately failed because of the credit crunch and ensuing liquidity problems that almost saw Porsche go bankrupt.

Volkswagen is reportedly planning a complete takeover of the beleaguered sports carmaker in a series of two transactions. The company is planning the imminent purchase of 50 percent of Porsche shares and will purchase the remaining shares in the Stuttgart, Germany-based automobile manufacturer in a second step. Once completed, Porsche will become the 10th brand in the stable of Volkswagen, the world’s largest carmaker.

VW’s move to acquire Porsche follows a power struggle between the companies. Porsche had sought to buy VW through complicated loan transactions that collapsed when the sports carmaker’s liquidity dried up as a result of the credit crunch. It has already been reported that Wolfsburg-based VW would purchase 49.9 percent of Porsche, but we’ve now learned it is planning a complete acquisition in a second purchase of shares.

The deal envisions a payout to Porsche Automobil Holding of €8 billion (US$11.3 billion), enabling it to pay off the bulk of its crippling debts. VW is also considering acquiring Porsche’s Salzburg-based network of dealerships from its family owners, a move that could raise an addition €3 billion for Porsche.

Under the deal, the Porsche and Piëch families, Porsche’s shareholders, would obtain 50 percent of the shares in the merged VW-Porsche company. The western German state of Lower Saxony would maintain its 20 percent holding in the company and the door would be open for the emirate of Qatar to purchase between 14.9 percent and 19.9 percent of the company’s shares.

Reports last week stated that the Porsche and Piëch families had agreed to accept the Volkswagen deal and that the deal was now backed by Porsche supervisory board chairman Wolfgang Porsche, who had fought to maintain Porsche’s independence from VW.

The reports also stated that Porsche’s current CEO, Wendelin Wiedeking, would step down and that the families had agreed to replace him with Porsche production chief Michael Macht.

Wolfgang Porsche denied the report on Friday evening, rebuffing “speculation” that Macht would succeed Wiedeking. Wiedeking, he said, remained head of Porsche AG and Porsche Holding. Deputy chairman of the board and works council chief Uwe Hück also defended Wiedeking. “Wiedeking is chairman of the board and he will continue to be so,” he said.

Nevertheless, Wiedeking appears to be preparing for his exit. German news agency DPA reported last week that he has hired prominent labor lawyer Jobst-Hubertus Bauer to help him negotiate a severance package, a development also reported by the Financial Times Deutschland newspaper.

Wiedeking has reportedly been a client of Bauer’s for some time now. The labor lawyer has negotiated golden handshakes for several top managers totaling millions in recent years. It is reported that Wiedeking could be up for a deal worth more than €100 million.

Adapted from Spiegel

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Tags: debt, financial crisis, merger, porsche, takeover, volkswagen

Porsche And VW Merger Update

Posted on 26 May 2009 by Scott Hayes

It was only about 12 months ago that Porsche was being praised for its brilliance in business tactics to take over Europe’s largest manufacturer, Volkswagen. Now it seems the tables have turned. Volkswagen reported today that it has loaned 700 million euro to Porsche.

An interesting and somewhat bizarre move between the two Germany giants in the midst of their negotiations for a merger. Additionally Porsche is 9 billion euro in debt as of the end of January and as a result had to abandon its initial move to take over Volkswagen.

Reports from Germany today suggest the two companies will take longer than expected to reach a merger agreement. The original plan was to have a deal signed four weeks after initial negotiations began on May 6, but that now seems unlikely. Porsche already owns almost 51 percent of Volkswagen AG.

Both companies have said they are looking at creating an “integrated company.”

Financial troubles for the German sportcar manufacturer have become a public affair, in March Porsche tried to find 12.5 billion euros in loans to restructure its debt, but only managed to raise around 10 billion euro. Since then an additional 750 million euros has been raised and the company is actively seeking an additional 1.75 billion euros.

Porsche is said to not be dependent on external financing until March 2010.

Adapted from CarAdvice

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Tags: audi, bentley, bugatti, lamborghini, merger, porsche, scania, seat, skoda, takeover, volkswagen, volkswagen commercial vehicles

Porsche And Volkwagen Set To Merge

Posted on 07 May 2009 by Scott Hayes

Porsche has finally abandoned plans to acquire a larger share of Volkswagen, of which it already own 51 percent. Instead the two German companies have revealed plans to merge into one integrated company within four weeks.

Currently the VW group and Porsche are managed independently of each other. Under the merger 10 brands will be managed by one management board.

The decision to merge the two companies comes after Porsche’s attempts buy up to 75 percent of VW for a controlling share have been repeatedly blocked.

Volkswagen has welcomed the merger and already representatives from Porsche and VW are in discussions about the form of the new company.

The state of Lower Saxony, where VW is based is also taking part in discussions, as a 20 percent stake holder in VW they have the power to veto strategic decisions.

Under the new company VW’s nine brands: Volkswagen, Volkswagen Commercial Vehicles, Scania, Skoda, Lamborghini, Bentley, Bugatti, Seat and Audi will each maintain a unique sense of identity. Porsche will also maintain its identity.

The new entity will allow Porsche greater access to technology and systems from the Volkswagen catalogue, not that it’s been lacking in that department so far.

Both companies can now get back to their primary business of building great cars.

Adapted from TheMotorReport

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Tags: carl-peter foster, economic crisis, general motors europe, international monetary fund, piech, porsche, takeover, volkswagen, wendelin wiedeking

Volkswagen Weighing Up A Bid For Porsche

Posted on 24 April 2009 by Scott Hayes

Volkswagen is considering an audacious reverse-takeover bid for its majority shareholder, Porsche, in a twist in the drawn-out struggle for control between the two German carmakers.

The Volkswagen Group’s supervisory board is said to be weighing the possibility of purchasing Porsche AG, in a move that would relieve its holding company, Porsche SE, of massive debt that industry analysts suggest the company may not be able to fund should the world’s financial crisis drag on well into 2010–a scenario put forward this week by the International Monetary Fund.

The secret plan emerged as shareholders were set to convene at Volkswagen’s annual meeting on Thursday, and it comes after Porsche revealed that it is carrying some 9 billion euros in debt, most of it owing to interest on loans taken out to purchase its 50.8 percent stake in VW.

Porsche on Thursday said that the 280 million euros it would receive in dividends from Volkswagen and its own operating profits would be sufficient to service interest payments for 2009. However, questions still hang over Porsche’s ability to meet ongoing budgetary concerns, most notably its traditionally large spending on research and development.

Porsche has raked in massive profits in recent years on controversial option trades for Volkswagen. It recently reported a windfall of 6.8 billion euros – or more than double its own revenue – from its takeover of Volkswagen. However, the gains are mainly related to an increase in the Volkswagen share price, which the banking sector describes as paper gains that are not easily converted to cash.

The revealing of the Volkswagen plan to consider a bid for Porsche has cast a shadow over the long-term future of Wendelin Wiedeking. The straight-taking Porsche chairman originally was hailed in financial circles for his daring takeover of Volkswagen, a company more than 10 times Porsche’s size. But with the world’s financial crisis hitting Porsche’s earning potential and its ability to service loans, there have been suggestions that he could be ousted by the Porsche and Piech families, which together hold a majority stake in Porsche.

For some time now, German automotive-industry analysts have suggested that General Motors Europe boss Carl-Peter Foster could take the helm at Porsche should its bid to wrest control of Volkswagen fail.

Adapted from Autoweek

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