Porsche Gets Green Light on VW Takeover

March 3, 2008

German innovation or collusion? Porsche's leadership says it has permission from the board of directors to acquire Volkswagen AG, Germany's biggest automaker.

The long-unfolding story between the automakers has its roots in German law. The state of Saxony, where Volkswagen is headquartered, owns a 20-percent stake in the larger automaker. But with European laws changing to make a foreign takeover more likely, Porsche stepped in through the past two years to acquire its current 31-percent stake in Volkswagen. Between them, Saxony and Porsche control 51 percent of VW - but Porsche's actually made money off the stake, so increasing it makes fiscal sense.

A complete takeover by Porsche would keep Volkswagen in German hands, while possibly enforcing some strict restructuring of the company like that which turned Porsche into a leaner company, though - and it may have the blessing of Ferdinand Piech, the former VW chairman who controls a big chunk of Porsche shares.

Regulatory concerns will likely mean a few months before Porsche could take control of VW. And even if Porsche succeeds in the takeover, it's said it has no plans to combine the two automakers--but will instead create an alliance that will help the company compete better.

Porsche Gets Board Approval To Take Majority Stake in VW - WSJ.com

2019
The Car Connection
See the winners »
2019
The Car Connection
Commenting is closed for this article
 
Ratings and Reviews
Rate and review your car for The Car Connection
Review your car
The Car Connection Daily Headlines
I agree to receive emails from the site. I can withdraw my consent at any time by unsubscribing.
Thank you! Please check your email for confirmation.