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

In late July Porsche announced Wendelin Wiedeking would be leaving his position as the company’s CEO to be replaced by Michael Macht, clearing the way for the supervisory board at Volkswagen to lay the foundation for an integrated company with Porsche under Volkswagen leadership.

This week, Volkswagen announced that it will take a 49.9 percent stake in Porsche, in a first step towards an integrated automotive group with the sports car company. This was agreed between Volkswagen and Porsche during negotiations on the contracts of implementation relating to the merger of the two companies.

The timetable for the creation of the integrated group remains unchanged: Volkswagen will acquire a participation in the operating business of Porsche by the end of 2009. The merger of the companies is still scheduled to take place during the course of 2011.

Based on the enterprise value calculated for Porsche, Volkswagen is expected to pay approximately €3.9 billion (R44.1 billion) for the participation in the company.

For worried Porsche fans, Volkswagen has stated that it remains committed to the phased integration of the two companies and to preserve the independence and the interests of Porsche.

Adapted from MotorAuthority

Europe’s largest automaker, Volkswagen, and Porsche announced at the end of last week that they reached an agreement to merge their operations to create an integrated automotive group led by VW. Under the agreement, Volkswagen will buy a 42 percent stake in Porsche’s automotive unit by the end of 2009. The merger, which will see the creation of a group with 10 brands, sales of around 6.4 million vehicles and more than 400 000 employees, will be achieved in several stages, and is expected to be completed by 2011.

According to VW, Porsche will remain an independent company headquartered in Zuffenhausen. “As is the case today with Audi and other successful group brands, Porsche will retain its identity, while at the same time benefiting from its membership of the integrated group,” said VW in a statement.

“Volkswagen and Porsche today took a decisive step towards a joint future. As a group with now ten, strong, independent brands, we will further expand our unique global position,” said Martin Winterkorn, Chairman of Volkswagen’s Board of Management.

“More than ever before, we now have what it takes to become the automotive industry’s number one. Volkswagen is systematically continuing its successful multibrand strategy by integrating Porsche. Additional new growth opportunities will emerge for Porsche under the umbrella of the integrated group,” Winterkorn added.

Interestingly, it was Porsche that had been trying to take over Volkswagen that past few years as the Stuttgart sports carmaker had built a 51 percent stake in the German group and was aiming to increase it to 75 percent.

However, at the same time Porsche built a debt of nearly 10 billion euros, or around US$14 billion, as the automotive market was hit by the ongoing financial crisis, leading to the departure of Porsche CEO Wendelin Wiedeking and forcing the company to seek help from VW.

Adapted from CarScoop

The on-going feud between the families behind Porsche and VW continues to spill into the business dealings of the two companies. Both Porsche and VW have angled for the better part of four years to be in a position to acquire a controlling interest in the other German automaker. Now Porsche appears to have a backer from the Middle-East willing to fund their next coup attempt.

The management teams of Porsche and Volkswagen will meet in the next two weeks to discuss an investment by the Qatar sovereign wealth fund, with the aim of strengthening Porsche’s bid to takeover Volkswagen. Porsche CEO Wendelin Wiedeking has been pursuing control of VW since 2005 when he first bought a stake in the larger company. That strategy began to fall apart when the global economy evaporated and Porsche, along with much of Wall Street, didn’t have the cash to finance its acquisition of VW.

The dealings between longtime rivals Porsche and VW have been acrimonious to say the least. The VW supervisory board chairman is Ferdinand Piech, the great grandson of Ferdinand Porsche. His family is also part of the controlling stakeholders in Porsche. At one time, it was believed that Piech and Wiedeking were working towards a Porsche move to acquire VW. But in recent months, Piech has been openly critical of Porsche’s moves and its excessive debt.

If he chooses, Piech, as a significant Porsche shareholder, can block the Qatar investment. Qatar is looking for voting shares in Porsche in exchange for investing billions. Up to now, the Porsche and Piech families have controlled all the voting shares.

If the Qatar investment doesn’t go through, the possibility exists that Wiedeking will be removed as CEO and that Porsche will be absorbed by VW.

Adapted from RideLust

Volkswagen says it has indefinitely halted talks over its merger with Porsche, saying the sports car manufacturer is not prepared for a partnership. Porsche went into significant debt earlier this year acquiring a majority share in Volkswagen.

Volkswagen says that Porsche, which wants to align the two automakers together under one umbrella, lacked a sufficient strategy for the potential integration.

“We recognized at the end of the week that Porsche is lacking several fundamental conditions for the discussions”, a VW spokesman said on Sunday.

The automakers had planned to meet today to discuss the merger, but the meeting has been cancelled. Porsche says that the talks will continue, but Volkswagen says it is holding off.

The Porsche-VW tie-up is a family affair; Porsche’s supervisory board is mostly made up of Porsche family members and VW Chairman Ferdinand Piech is a grandson of Porsche founder, Ferdinand Porsche. Yet Piech says that Porsche, the automaker, must reduce its 9 billion euro debt before it seriously considers an integration with VW. Porsche incurred the debt when it scrambled to pick up a controlling share in VW late last year.

Adapted from LeftLaneNews