After many months of corporate negotiations, the first step toward Germany's great auto unification is now clear: Volkswagen has agreed to pay €3.3 billion (roughly $4.7 billion) for a 42% stake in Porsche AG, which has been valued at €12.4 billion.
Details of the subsequent steps involved in the Porsche/Volkswagen merger seem murky, although both companies want the deal to conclude by the close of the 2011 calendar year. Included in the merger arrangement is VW's purchase of the Porsche and Piech families' auto dealership business, which, at 474,000 annual sales, is Europe's largest.
Information about the Gulf state of Qatar and its involvement have also been hammered out: Qatar Holding LLC, on behalf of the Emirate of Qatar, has purchased 10% of Porsche SE (automaker Porsche AG's parent company), and it has also bought the options that Porsche held on 20% of Volkswagen shares. This will make Qatar among the largest shareholders in the new, merged company -- behind the Porsche and Piech families, who will maintain a 35% to 40% stake, and possibly greater than the German state of Lower Saxony.
At the moment, the arrangement is still on-track to remain a friendly merger. Should negotiations bog down, however, there are provisions for Volkswagen to purchase the remainder of Porsche AG outright.