Find a Car
Go!

Feud Subdued: VW To Buy Porsche For $11.28 Billion

Follow Richard

Porsche Volkswagen Merger

Porsche Volkswagen Merger

Enlarge Photo

From Germany today comes news that the long struggle between Porsche and Volkswagen may be coming to an end. According to  German weekly Der Speigel, the Porsche and Piech clans -- which own 100% of Porsche SE -- have agreed to sell the entirety of their sports car unit, Porsche AG, to VW for approximately €8 billion ($11.28 billion).

It seems like just yesterday that Porsche was hoping to buy a 75% stake in Volkswagen and end the stepsibling rivalry. Even at the beginning of the worldwide economic crisis, it appeared that Porsche might still be able to pull off the deal, since high-end automakers weren't feeling the same pinch as more generalized companies. But then came spring, and the financial bottom fell out across the board, and Porsche had to table its plans.

Since then, there's been persistent talk of merging the two entities, but Porsche has been resistant. Recently the company was in talks with investors in Qatar, who expressed interest in purchasing a portion of Porsche AG. That would have provided more capital for Porsche to relaunch its bid, but in the meantime the company's debt swelled to over €10 billion, making any takeover plans implausible.

Now, the company that chose not to play nice and partner with Volkswagen is being consumed whole-hog. According to Der Speigel, the takeover will be conducted in two stages: Volkswagen will begin by purchasing a 49.9% stake in Porsche AG, with the remaining 50.1% to be purchased by at a later date. The deal is set to be approved at a meeting of Porsche SE's supervisory board this Thursday, July 23.

So far, Porsche has not commented on the story, saying only that it was speculative and that Porsche has not been informed of any deal. Furthermore, a German newspaper, Sueddeutsche Zeitung, has cast a sliver of doubt on the dealings by suggesting that tax liabilities might throw the deal off the track. Although we enjoy the industry drama that Porsche/VW feud has generated, we hope that's not true -- especially for Porsche, who needs a serious infusion of cash right about now. Expect a bumpy ride in Germany this week.

[NYTimes]

Posted in:
 
Follow Us

Commenting is closed for this article
 
© 2015 The Car Connection. All Rights Reserved. The Car Connection is published by High Gear Media. Stock photography by izmo, Inc. Send us feedback.