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.